Unemployment Benefits and Employment Programmes

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Unemployment Insurance Fund

The Unemployment Insurance Fund (UIF) is a social insurance fund, established according to the Unemployment Insurance Act (No.30, 1996) to protect employees in the event of unemployment. The UIF covers employees in the formal economy (eg. workers in micro and small enterprises) , domestic workers and farmers.  In 2010, 642 007 domestic employees were registered, compared to 7 109 462 commercial employees in the formal sector. In 2010 UIF had 7.8 million declared and effectively registered participants. However, an estimated more than 4 million people were still left uncovered. Therefore consideration is being given to the extension of the UIF to the self employed and atypical workers.

The contribution rate is 2 per cent of the employee’s salary (1 per cent by the employer and 1 per cent by the employee) paid monthly through the payroll tax collected by the South African Revenue Services or paid directly to the UIF by those in informal or irregular employment. Five categories of benefits are covered under the UIF Act – namely unemployment, maternity, illness, and adoption and survivor benefits in the event of the contributor’s death. While the primary benefit is for unemployment, contributors may also claim benefits during short periods of illness or absence from work due to maternity or adoption. The unemployment benefit ranges from 38 per cent of income for high income earners to a ceiling of 60 per cent of income for the lowest income earners, paid for a maximum period of 238 days.

There is still a large gap between the number of unemployed and the number of people with claims on the Fund.  In 2010, 628 595 people received unemployment subsidies. This amounts to only 15 per cent of the 4.1 million unemployed (24 per cent of the active population). Part of the reason for the inefficient coverage is that more than 50 per cent of the unemployed report that they had never worked and thus they have never contributed to the UIF, making them ineligible.  Of those that had worked before, almost 68 per cent had been unemployed for more than a year and would have exhausted their benefits if they had ever been eligible for them (238 days, roughly 8 months). Over the last two years there has been an increase in uptake of beneficiaries due to the economic crisis. In order to improve its coverage, the UIF is studying the extending unemployment benefits and introducing a social continuation benefit for the long term unemployed.

UIF payments and beneficiaries 2009-2010

_{Source: South Africa Treasury, 2011 Budget Review, Chapter 7}

The Expanded Public Work Program

Designed to alleviate the negative effects of unemployment, particularly among workers with little or no expertise, the Expanded Public Work Program (EPWP) has become the cornerstone policy of the labour intensive programmes in South Africa. In Phase 1, from 2004/5 to 2008/9, EPWP exceeded its target of 1 million work contracts. Building on this success, the programme, in Phase II, aims to target 4.5 million work contracts, averaging 100 days per work contract. The target of 4.5 million is cumulative over a five year period till 2013/2014 and thus amounts to around 1.5 million contracts per annum. The EPWP is an important part of the current employment policy. However, the EPWP model can’t easily be up scaled or converted into an employment guarantee scheme due to its characteristics as it was designed to increase labour intensity of existing government investments. As a result, the Community Work Programme (CWP) was launched as a complementary employment guarantee scheme.

The Community Work Program

The Community Work Programme (CWP), on the contrary, provides a minimum level of regular, predictable work – typically two days a week or the monthly equivalent. The current wage is ZAR60 (about USD8.75) a day. The plan is to have the programme operating in at least two wards per municipality by 2014. The CWP is designed to upscale public employment to meaningful levels – with a tested 65 per cent labour intensity (per cent of wage in total programme expenditure) at site level for the first two years of operation.

Social Relief of Distress Fund

This is short term relief provided by the government, mainly in the event of extreme circumstances such as fire, floods and other natural disasters. This support is based mainly on need but it is also means tested. The relief can either be in kind or in cash, and the value of the support is based mostly on need.

The Social Relief of Distress Fund (SRD), established prior to the 2008 food crisis, is a temporary provision of monthly assistance for a maximum of three months for persons who are unable to meet the most basic needs of their families or themselves. While some provinces in South Africa give the grant in the form of cash, it may also be distributed as a food parcel or voucher.  In response to the recession, the money allocated to the SRD increased from ZAR 13.6 million (approx. USD2 million) in November 2008 to a peak of ZAR 57.2 million (approx. USD8.5 million) in January 2009. In addition to the SRD, the government, with the help from the private sector, NGOs and community-based organizations, issued agricultural starter packs to particularly vulnerable communities. By the end of 2009, ZAR76 million (approx. USD11.43 million) has been spent distributing the agricultural starter packs in various provinces.

Apart from the short term measures taken by the relief programme distributing agricultural starter packs and money,  the SRD hopes to make  basic food items more accessible and affordable  assisting, in particular, those who are struggling to manage their living costs due to this recession. To this end, the Competition Commission and Tribunal are currently investigating the concentration and mark-up levels in the food supply chain – with a view to assessing behaviour that is harmful to consumers.

 

Regímenes de seguridad social y programas por rama