The Unemployment Insurance Fund (UIF) is awash with cash, with a surplus of R133.3-billion, but those claiming benefits are becoming increasingly frustrated by inexplicable delays.
“Till this day, I am waiting for my payout … every time I went I was given the runaround and I would still like to be granted the status of my claim,” one frustrated claimant responded to an online survey by the Mail & Guardian.
Another said: “I was told that I don’t qualify after two months of going through the process. I was supposed to be told from the onset that I don’t qualify since they have my profile.”
Many other UIF claimants also complained, rating the service and their experience of local labour centres as bad. But some did say the process went smoothly at some branches.
The UIF says on its website that the normal turnaround time for a claim should be between 14 to 21 days.
Claimants have to supply a copy of their ID, a bank statement, proof they are a job seeker and complete an UI-19 form to confirm they are unemployed.
Unemployment is rising — the latest Statistics South Africa figure has risen to 27.7% — but employees’ payments into the UIF increased by 6.4% last year to reach R18.2-billion, up from the previous year’s R17.1-billion.
The UIF paid out R8.4-billion last year compared with R7.6-billion the year before, according to department of labour spokesperson Teboho Thejane — an increase of 10%. This amounts to 675 416 claims settled. He said 90% of submitted applications were processed in the 2015-2016 financial year.
The M&G’s respondents reported that long queues and bad customer service are typically the picture at labour centres and that some of them had even given up on their claims.
“The process to claim for UIF benefits payout is supposed to be easy and efficient, but this is not the case,” said one respondent.
Democratic Alliance MP Michael Bagraim blames it on an administrative system malfunction. “We were promised by the director general of labour and his officials about a year ago that the system will be moved to a paperless one to solve all of these problems but that has not happened,” he said.
By law, contributors to the fund have the right to claim for retirement, unemployment or maternity benefits. They pay 2% from their salary to the South African Revenue Service every month towards the social security fund.
UIF spokesperson Makhosonke Buthelezi confirmed there is R133.3-billion in the fund and that for this year alone there was a surplus of R13.2-billion.
The surplus “is accumulated through contribution and investment revenue, which continues to accumulate as we realise payments from dividends and other sources, such as interests and penalties”, he said.
“While we pay between R38-million to R40-million in claims per day to an average of about 10 000 people per day, the money is also dispensed via the labour activation schemes, which are aimed at retraining retrenched UIF contributors in various skills that can help them to be employable or start their own businesses,” Buthelezi said.
“In some instances, the fund assists companies in distress to be provided with turnaround solutions to help them back on their feet again and save jobs. Last year alone, 6 781 people benefited from the schemes at a cost of R145.5-million.”
He said the department is upgrading its IT infrastructure to speed up the processing of claims and this is at an advanced stage, but he could not say when it would be complete.
The UIF expects the surplus to be decreased because of recent amendments made to the Unemployment Insurance Fund Act, which has increased the maximum payout claims from R14 872 a month to R17 712.
Currently beneficiaries can claim benefits for eight months but this has been extended to 12 months. Women who have miscarriages will also be covered by the amendments.
UIF benefits are based on a contributor’s gross income and so can differ for each claimant, according to the department.
The UIF is a public entity reporting to the department of labour.
Thejane said the department regrets the inconvenience caused by the upgrading of its IT system but he said there can be other reasons for unsuccessful claims.
“If the contributor has voluntarily resigned, this may lead to an unsuccessful claim,” he said.
Delays can also be caused by claimants submitting incorrect information, such as bank details on their forms, and sometimes employers give incorrect reasons for unemployment on the UI-19 form.
In the case of maternity beneficiaries, if they do not claim UIF within six months, they forfeit the claim.
While the problems at labour centres persist, UIF consulting services are thriving. They provide professional services to make claims “hassle-free” but they charge on average between R350 and R500 for a claim. Most of the claims are for maternity benefits.
But even this often does not help those desperately in need of unemployment benefits.
“I got my money when I was back at work,” said a respondent who applied for a maternity benefit.
The UIF has been under scrutiny for the past four years because of bad financial management. The auditor general reported irregular expenditure in the UIF of R64-million last year.
But Buthelezi said the noncompliance “is largely due to procurement processes and procedures and not theft”.
The department of labour said beneficiaries should follow up on their claims by contacting labour centre managers directly. Details can be found on the website www.labour.co.za or claimants should visit their local labour centre and take their ID book with them. — Thulebona Mhlanga is an Adamela Trust trainee journalist at the Mail & Guardian