Unemployment Insurance Fund (UIF) beneficiaries are to have their grants paid directly into their bank accounts in future, in terms of an initiative launched by the fund and First National Bank on Thursday.
”This is the second phase of our struggle — to liberate people from queues,” UIF commissioner Shadrack Mkhonto told a launch ceremony in Pretoria.
”Our people fought for many years to get their freedom. Our role is to ensure they enjoy that freedom with dignity.”
FNB CEO Michael Jordaan said the initiative will benefit about 200 000 UIF beneficiaries countrywide, about 80% of whom already have bank accounts.
FNB will pay the funds into the accounts of all beneficiaries — including those who use other banks — and will encourage the remaining 20% also to open accounts, he said.
Those who do not have accounts could open an Mzansi account — which involves no bank costs.
The initiative, which has already started with some clients, will be phased in over time, starting in Gauteng.
To date, FNB has been assisting the UIF making cash and cheque payouts once a month.
Jordaan said the initiative is expected to save beneficiaries, the UIF and the bank a lot of money. Beneficiaries can use cellphone banking or mini automatic teller machines, deployed in the most rural areas, to manage their cash.
”No one deserves to stand in line for hours on end to get the money they deserve,” he said. ”We want to be part of making South Africa a better country.”
The new system will enable the unemployed to spend more time doing what matters most — finding a job. It will also save them the cost of transport to UIF pay points.
Jordaan said the system is hoped to diminish fraud by removing large amounts of cash from the control of officials, and should help prevent beneficiaries being robbed of their cash.
Minister of Labour Membathisi Mdladlana described the initiative as the start of a ”very long journey” to economic freedom.
”We have political freedom. The battle now is for economic freedom,” he said.
He expressed the hope that the system will be extended to pension and other government grants, ”so that people can go as and when they want to cash their money”. — Sapa