UIF Covid-19 TERS benefit - Update on sustainability of funds

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UIF

In a statement released by the Department of Employment and Labour states that the first batch of Covid-19 Temporary Employer/Employee Relief Scheme (TERS) benefits were paid by the Unemployment Insurance Fund (UIF) to the employers of candidates on the 16th of April.  

According to the department, the UIF experienced a remarkable spike in the number of applications as a result of the loss of income and employment due to trading restrictions during the national lockdown.

Within five weeks, the UIF had paid more than R15 billion to beneficiaries, marking a historic first in terms of a lump sum paid out by the Fund within such a short amount of time.

The Minister of Employment and Labour Thulas Nxesi, has commended the urgency and seriousness with which the Department and the UIF in particular, have responded to the enormous challenge presented by the Covid-19 pandemic breakout.

"When confronted with a challenge of this magnitude, you either swim or sink. This has been the ultimate test of leadership for almost everyone, whether you are leading an organisation or you are simply expected to contribute towards the flattening of the curve in your personal capacity; we were all called to show up without prior notice.” said Minister Nxesi.

He added that despite several challenges, the entity continues to perform its duties to the public, “I believe it has risen to the task under extremely difficult circumstances. The noting of achievements is of course not to deny the existence of challenges".

Thus far, the money paid out to beneficiaries has had a direct impact on 3 million workers. This protects livelihoods against the devastating effects of Covid-19. 

"While the easing of the nationwide lockdown regulations to alert level 3 would see the economy gradually reopening, the negative impact of Covid-19 would continue to be with us for a foreseeable future. We expect an increase in labour-related disputes due to retrenchments and termination of employment as employers try to stay afloat. This would undoubtedly place a further strain on our ability to meet our social security obligations to the public", Minister Nxesi continued.

The department’s delegation will be attending a meeting at NEDLAC on Thursday where social partners will look at the UIF’s technical and financial capability to continue paying out TERS benefits in the long run.

Nxesi says the department needs to guarantee the sustainability of funds beyond June 2020. 

The social partners will also look at other issues relating to their mandates and how they can collectively respond to the various challenges within the context of the move to alert level 3.

The minister says the department expects social partners to pledge their commitment and support for return to work strategies that place the safety and welfare of workers above any other interest. 

He says the department will implore the partners to work with government in resolving the current and anticipated challenges, including post-COVID-19 related difficulties.

"We encourage employers to consult broadly when it comes to major decisions with an impact on job security such as intentions to lay-off workers. Retrenchments must be the last resort out of all the available remedies to the challenges we face.” 

He concluded by saying “we also expect employers to fully cooperate with labour inspectors who continue to enforce workplace regulations to protect the welfare of workers. We go to NEDLAC trusting that we will collectively explore opportunities available to all of us as partners to resolve the multiple and immense challenges presented by the pandemic."

Covid-19 TERS applications for May will open at midnight tonight.

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