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Summary of Unemployment Insurance Amendment Bill

Purpose:

a. To amend the Unemployment Insurance Act, 2001, so as to provide for the extension of the unemployment insurance benefits to learners who are undergoing learnership training and civil servants;

b. to adjust the accrual rate of a contributor’s entitlement to unemployment insurance benefits;

c. to finance employment services;

d. to extend a contributor’s entitlement to benefits under certain circumstances;

e. to provide for the process of application for maternity benefits;

f. to repeal some enforcement provisions;

g. to empower the Unemployment Insurance Board to provide in its constitution for the functions of regional appeals committees;

h. to amend Schedule 2 to the Unemployment Insurance Act, 2001, so as to provide for the adjustment of the Income Replacement Rate; and to provide for matters    connected therewith.

Amendments:

SECTION 3:

Purpose of amendment is to extend unemployment insurance benefits to employees who are under contract of employment contemplated in section 18(2) of the Skills Development Act, and employees as defined in Section 1 of the Public Service Act.

SECTION 5:

Purpose of amendment is to make provision for the refinancing of unemployment insurance beneficiaries to facilitate re-entry into the labour market.

SECTION 7(1):

Purpose of amendment is to provide for the money of the fund, other than the money required to meet the current expenditure of the fund, to be deposited on behalf of the fund with the Public Investment Corporation.

SECTION 12:

Purpose of amendment is to make provision for the payment of benefits to contributors who lose part of their income due to reduced working times, and to provide for a fixed rate of payment of maternity benefits.

SECTION 13

Section 13(3) provides that a contributor’s entitlement to benefits accrues at a rate of one day’s benefit for every completed six days of employment as a contributor, subject to a maximum accrual of 238 days. It has been found that the maximum of 238 days is not line with Schedule 2 of the Act. In order to address this anomaly, section 13 is amended to provide for 365 days instead of 238 days.

Section 13 is further amended by the insertion of a new provision which seeks to allow contributors to claim benefits if they have credits, regardless of whether or not they claimed that four-year cycle.

SECTION 14

Purpose of amendment is to repeal section 14(a) of the Act.

SECTION 17

Purpose of amendment is to increase the period of submitting applications for unemployment benefits. Currently applications must be submitted within 6 months and the proposal is to extend the period for submitting unemployment benefits from 6 to 12 months.

SECTION 20

Purpose of amendment is to provide that a contributor would be entitled to illness benefits if the days of illness are less than 7 days.

SECTION 24

Purpose of amendment is to provide for a period when a contributor is entitled to maternity benefits in case of miscarriage.

SECTION 25

Purpose of amendment is to provide for a period when a contributor is entitled to maternity benefits in case of miscarriage.

SECTION 30

Purpose of amendment is to extend the period in which the dependents may apply for benefits on behalf of the deceased from 6 months to 18 months. Section 30 is further amended by the insertion of a new provision allowing contributors to nominate their beneficiaries in cases of death benefits.

SECTION 33

Purpose of amendment is to prohibit any agency or person purporting to be acting on behalf of the applicant to charge a fee against the applicant.

SECTION 36A

The amendment seeks to empower the Board to appoint regional appeals committees for each region determined by the Minister

SECTIONS 38,39,40 AND 41

Purpose of amendment is to repeal all of the above sections.

SECTION 50:

Purpose of amendment is to give powers to the Board to stipulate functions of the regional appeals committee.

SECTION 56

Purpose of amendment is to provide for a new provision empowering the Minister to issue regulation on a special dispensation applicable to domestic employers and small businesses or enterprises regarding the submission of information in terms of that section.

SCHEDULE 2

Purpose of amendment is to empower the Minister to vary the Income Replacement Rate and the benefit period through regulations.

 

Consultation:

The following bodies were consulted:

- The Board, which is constituted by appointees of NEDLAC.

- Interdepartmental Task Team on Social Security and Retirement Reforms.

The Task Team consists of: National Treasury, Department of Public Service and Administration, South African Revenue Services, Department of Social Development, Department of Labour, Department of Transport, Road Accident Fund, Department of Health and South African Social Security Agency.

- National Treasury was also consulted separately.

- The Bill was tabled and discussed with social partners at NEDLAC and a report was issued.

 

Financial Implications for State:

The Bill has the following financial implications for the State:

- The Actuaries has issued a report on the proposed amendments and their findings are that the proposed amendments are not going to have a negative impact on the financial status of the Fund and that the Fund will be able to cover the cost of the proposed amendments without any difficulties.

- The inclusion of public servants will not affect the budget of the State since the UIF will pay benefits and Government reimburse the actual expenses paid as benefits.

Parliamentary procedure:

- The State Law Advisers and the Department of Labour are of the opinion that this Bill must be dealt with in accordance with the procedure established by section 75 of the Constitution of the Republic of South Africa, 1996, since it contains no provision to which the procedure set out in section 74 or 76 of the Constitution applies.

- The State Law Advisers are of the opinion that it is not necessary to refer this Bill to the National House of Traditional Leaders in terms of section 18(1)(a) of  the Traditional Leadership and Government Framework Act, 2003 (Act. No. 41 of 2003), since it does not contain provisions pertaining to customary law or  customs of traditional communities.

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