The Department of Employment and Labour has lauded its agency, the Unemployment Insurance Fund (UIF), for being at the forefront of creating jobs and preserving the ones already existing through investments made by the Public Investment Corporation (PIC) and the fund’s Labour Activation Programmes (LAP).
In a statement, the Department of Labour said in March 2017, the UIF and the Industrial Development Corporation (IDC) signed the Facility and Subscription Agreement to bring into effect a substantial investment of R5 billion.
The department said the IDC has approved 41 qualifying transactions totalling R2.304 billion, R130 million of which was for companies in distress and relating to job preservation.
“So far, the investment had created and saved 8 007 jobs by 31 December 2021.
“Although this may seem like a drop in the ocean considering the unemployment rate increase of 7.6% in the third quarter of 2021, what is important to note is that these jobs were created in the tough economic environment where the COVID-19 pandemic wreaked havoc on the South African economy.
“[This] led to companies claiming from the COVID-19 Temporary Employer / Employee Relief Scheme (COVID-19 TERS) to afford workers’ salaries, while others resorted to outright retrenchments to survive,” the department said.
Through the COVID-19 TERS Relief Scheme, the UIF has been able to save jobs and bring relief to more than five million workers and this was made possible by the investments it has with the PIC.
“Drawing cash from these investments to fund COVID-19 TERS has come at a cost, as our investment declined by 24% from R151 billion to R115 billion by end of March 2021.
“Contrary to some of the rumours, the UIF remains in a sound financial position. The Fund’s assets have increased from R 115 billion to R 124 billion by 31 December 2021, and this should enable us to pay future claims and cover our administrative costs,” the department said.
The department said historically, the UIF has always been able to meet its financial obligations.
For example, the department said in the year ending 31 March 2021, the UIF paid R17.1 billion from 918 916 approved claims.
Currently, the Fund continues paying COVID-19 TERS benefits, which have exceeded by R26 billion from the R40 billion initially set aside when the relief scheme was launched in March 2020.
In addition, the Fund has set aside R5.8 billion to pay for the reassessment of normal UIF benefit claims submitted between 19 January 2017 to 31 December 2018.
“This step is taken because the Fund delayed implementing the 2016 Amendment Act due to operational challenges, which resulted in short payments of many beneficiaries who submitted claims during this period.
“The support for small and medium enterprises is very critical, as it is where most jobs are created. It is gratifying to note that 1 171 jobs were created from transactions concluded with small and medium enterprises. Companies with women ownership make up eight transactions that created and saved 835 jobs and 713 jobs, respectively,” the department said.
The department said the UIF recognises that the transformation of the economy is fundamental to the success of South Africa.
“Through the IDC/UIF facility, 22 black industrialist-owned businesses have been supported to the value of more than R1 billion and these deals have created 1 859 jobs. About 17 start-ups were also funded, to the value of R1 044 million creating 854 jobs,” the department said.
The department said the Fund will continue all efforts within available resources to save and create jobs.
Source: South African Government News Agency