UIF Has Funds Available To Extend TERS, says B4SA
Business for South Africa calls for Government to extend the Covid-19 Temporary Employer/Employee Relief Scheme as it was found that the Unemploymnt Insurance Fund does indeed have the funds to do so. The scheme was set up and launched in March and applications closed in September.
Business for South Africa (B4SA), a business lobby group, is now calling for Government to reverse their decision to not have the Covid-19 Temporary Employer/Employee Relief Scheme (TERS) extended after September. The scheme was introduced by the Unemployment Insurance Fund (UIF) in March to help employers in distress provide wages to their employees.
It was previously said that discussions took place at National Economic Development and Labour Council (Nedlac) to extend the scheme pass September. The announcement that it will not continue therefore came as a surprise to many, B4SA's Robert Legh being one of them.
We have been meeting for the last month to explore the possibilities of extending the benefit and from what we can see from the statistics, there are funds available to cover us until at least the end of December.
- Robert Legh
These engagements between Nedlac and B4SA is said to have been encouraged by Government with B4SA learning about statistics in a meeting with Nedlac just last Friday. "It's very disappointing," said Legh.
The scheme not being extended could have complications for businesses and their workers. It was originally supposed to go on as long as the National State of Disaster was declared. However, Government has made the decision to put an end to the scheme. The relief scheme was one of the main elements of the President's R500 billion relief plan during the pandemic.
Legh says that for some people, the benefits they receive from TERS is between R3500 and R6700 a month. This might not seem like much but for many people it makes a massive difference.
This end to TERS also leaves employers to have to disburse funds which they might already be suffering with. These difficulties could then lead to employers retrenching workers. Workers being retrench seems to be the logical thing to do, says Legh, as they'll receive more benefits from Unemployment.
There was a consensus at Nedlac, it needed to go to the decision makers for a decision and the consensus was that from a liquidity perspective, something like R51 billion in liquid assets were available in the Fund and the cost of extending the benefit would probably be another R4 billion a month for the next three months so there's definitely money available.
Legh says that there are concerns about retrenchments and whether the Fund will have sufficient long term reserves if these funds should be used.
"We are in a crisis that's a 1 in 100 years crisis and you'd think that's what these funds and reserves are available to help out in these circumstances. We're very surprised and we're very disappointed and we hope that this decision is reversed."
The Congress of South African Trade Unions (COSATU) has called Government's move to not extend the Covid-19 Temporary Employer/Employee Relief Scheme 'reckless' and 'outrageous'. COSATU is now saying that the scheme not being extended was a decision made without consulting the owners of the Unemployment Insurance Fund (UIF) or the workers. The UIF has "deliberately refused to comply" according to COSATU.
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