Legislative Programme; Unemployment Insurance Fund Annual Report

Meeting report

LABOUR PORTFOLIO COMMITTEE
2 June 1998
LEGISLATIVE PROGRAMME: NEXT SESSION; UNEMPLOYMENT INSURANCE FUND ANNUAL REPORT

Documents handed out:
Unemployment Insurance Fund: Annual Report 1997

LEGISLATIVE PROGRAMME: NEXT SESSION
This was the last Labour Portfolio Committee meeting of the session. Nedlac's report was not yet available. They were waiting for a financial statement so that the two could be handed out simultaneously. Only the Unemployment Insurance Fund Report was presented.

The Chairperson, Mr Oliphant, announced that the two proposed overseas trips would not take place immediately due to budget cuts. The one to the I.L.O. Conference would be attended only by the Chairperson and the relevant Chairperson in the National Council of Provinces. The other trip to America was cancelled. Questions were asked about whether the money set aside for the cancelled Malaysian trip could not be used for the trip to America, but the Chairman explained this could not be done. It was proposed by Mrs Thabethe (ANC) that postponed visits to the Provinces should be made.

Regarding the public hearings on the Employment Equity and Skills Development Bills, the Chairperson suggested that these be held during the recess. The committee, however, opted for having them in the first week of the next session. These hearings are to be advertised in advance.

UNEMPLOYMENT INSURANCE FUND REPORT
The Director-General, Mr Pityana introduced Mr Mkhonto, the Unemployment Insurance Commissioner and Mr Smit, Deputy Director of Financial Administration. Mr Mkhonto went through the initial pages of the Unemployment Insurance Fund Presentation. The important points he made were: The Employer's Services function within the Unemployment Insurance Fund has been restructured. This has resulted in a considerable recovery of previously unpaid money and improved efficiency in handling the greatly increased volume of applications. Beneficiaries have increased by more than 100 000.

Mr Mkhonto continued by saying that many more people in higher income brackets are becoming unemployed. This is not only increasing the number of cases, but also the number who have to be paid out at maximum rates. In the Free State retrenchment in mining is giving rise to many large claims being made against the Fund. With the result payment of benefits exceeds fund income. The deficit is due to the impact of retrenchments. This gives cause for concern. If necessary the Unemployment Insurance Fund would have to go to the fiscus to bail them out.

Mr Smit took over the presentation and went through the financial pages of the report.

The Chairperson opened the floor for questioning. Mr Mkhonto was asked about fraud. He answered that most fraud cases occurred when people were given Unemployment Insurance benefits and were currently employed. As they do not inform the Fund when they resume working, they collect pay-outs as well as earning a salary. An attempt is being made to make employers responsible for notifying the Fund when employees are taken on.

In reply to Mrs Thabethe's question on appointments to the department, Mr Mkhonto said that appointments were made according to proper transformation considerations. The number of vacancies in the department had been reduced from over 85 to just over 70.

It was necessary to have more office points for people to make enquiries about their failed UIF applications. Difficulties were experienced with the Department of Public Works, which did not make premises available. It was decided that, if necessary, Public Works would have to be side-stepped.

In answer to questions about investment in the financial report, Mr Smit said that the money tabled under investment was the result of the inclusion of the previous homelands. This money was gradually being used up and soon there would be none left.

The meeting was adjourned.