12/03/2016 Quarterly Monitoring Report 1: April June THE AMENDMENTS TO THE UNEMPLOYMENT INSURANCE ACT, 2001 (ACT No. 63 of 2001) THE AMENDMENTS TO THE UNEMPLOYMENT INSURANCE ACT, 2001 (ACT No. 63 of 2001) MINISTER OF LABOUR: MS MN OLIPHANT MINISTER OF LABOUR: MS MN OLIPHANT

2 The Unemployment Insurance Act, 2001 (Act No. 63 of 2001) came into operation on 1 April The purpose of the Act was to establish an Unemployment Insurance Fund (UIF) to which employers and employees contribute and from which employees who become unemployed, or their beneficiaries as the case may be, can benefit. In that regard, the harmful economic and social effects of unemployment can be alleviated. BACKGROUND INFORMATION

12/03/20163 Over the years, the Fund has grown immensely to over R83billion in total assets. During economic meltdown, the Fund responded by contributing to training lay-offs by helping companies that were facing economic distress to cope with the crisis. Rather than employees been laid off, they were retrained and absorbed back by their companies. Jointly with the mining sector, the Fund is contributing to the housing development to the communities of Northwest province. PROGRESS OF THE FUND OVER THE YEARS

12/03/20164 In order to improve service delivery by the Fund, the Unemployment Insurance Board decided to recommend the Act should be amended. The proposed amendments to the Bill need to address the Issue of workers who are presently excluded in the Act and by so doing to conform with the International Labour Organization standards; improve payment of benefits to contributors; and extend the period within which benefits are payable. To comply with the Constitution of the Republic of South Africa, the Bill had to address the exclusion of civil servants in the current legislation. THE INTENTION OF THE UIF AMENDMENT

12/03/20165 The proposed amendments to the Act deal with a number of issues namely:  to include learners; public servants and foreign workers who are currently not covered in terms of the provisions of the Unemployment Insurance Act as it stands presently.  to extend the period of payment of benefits to the contributor from eight months to twelve months.  to extend the period in which a contributor can lodge a claim(from six months to twelve months). THE AMENDMENT BILL

12/03/20166  to allow beneficiaries to claim if they have credits regardless of when they last submitted a claim.  to provide for the nomination of beneficiaries in case of death benefits.  to assist in financing the employment promotion projects by the Public Employment Services  to give powers to the appeals committee to adjudicate on late applications for benefits  to give the Minister the power to vary the income replacement rate through regulations. THE AMENDMENT BILL ( CONT….)

THE AMENDMENT BILL The Bill delinks maternity benefits from unemployment benefits. Introducing a 66% fixed rate for maternity benefits. Paying full maternity benefits for miscarriage occurring in the 3 rd trimester of pregnancy. The Bill decreases the waiting period for illness benefits from 14 to 7 days 12/03/2016 Quarterly Monitoring Report 1: April June THE AMENDMENT BILL

12/03/20168 Cabinet has approved the UI Bill The Department released the Bill for public comments. After encapsulating public comments in the Bill, it was then tabled at NEDLAC for social partners to deliberate on the Bill. NEDLAC deliberations were concluded in November 2013 WAYFORWARD

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