Increase of the Scale of Benefits

Increase of the Scale of Benefits

The Unemployment Insurance Amendment Act, No. 10 of 2016 (“the Act”), is aimed at having a positive effect on the country’s labour force. Furthermore, there are likely to be positive effects on the economy as well.

The Act will see those who lose their jobs receive money for a longer period when they apply for unemployment benefits. The UIF benefits have been increased from 238 days to 365 days. A further change here is that employees will be able to apply for benefits over twelve (12) months as opposed to six (6) months as was the situation prior to the amendment.

Some further amendments relate to maternity leave. Expectant mothers were not able to claim maternity benefits because they could not claim until the child was born. This meant that only once the child was born, the benefits could be claimed for and were received upon the mother returning to work. Expectant mothers may now claim eight weeks before estimated due date, which should grant the benefits to the mother when necessary and not post-fact. The maternity benefit has also been increased from 45% of normal pay to 66%.

On 17 March 2017, the Minister of Labour, Mildred Nelisiwe Oliphant amended the Unemployment Insurance Fund scale of benefits contained within Government Gazette notice No. 588. The value of the benefit pay-out by the Fund has been amended. The changes in the amounts are an increase in the per annum rates, from R 178 464 to R 212 539 and an increase in the monthly amount to R 17 712 and an increased weekly amount of R 4 087.

The UIF thresholds were last adjusted in 2012. As a result of the new threshold values that will come into effect on 01 April 2017, these contributions will now increase to up to R 177.12 per month for employees who earn above the previous threshold value of R 14 872 and were capped at a maximum contribution of R147.82.

These changes will take effect from 01 April 2017.

Herewith a link to the Government Gazette notice: