As South African small businesses brace for the harsh impact of the coronavirus epidemic (COVID-19), the Unemployment Insurance Fund (UIF) on Tuesday said it had already recorded increased applications for its intervention programme.
The government promised businesses that they could rely on the UIF’s temporary employer/employee relief scheme, which funds employers facing economic distress.
UIF pay-outs would also apply to qualifying workers who are forced to work shorter hours or are left jobless because of the crisis, among other regular forms of dismissal.
Although it had been invoked as one of the government’s responses to the COVID-19 pandemic, the temporary employer/employee relief scheme had been around for some time.
Originally named the Training Layoff Scheme, the fund had about R2 billion deposited into it since the 2008 global recession and is overseen by the Commission for Conciliation, Mediation and Arbitration (CCMA).
Despite its extensive budget, not all categories of employers qualify for it with the yardstick a requirement that small, micro and medium enterprises (SMMEs) produce turnaround plans – a difficult ask during the COVID-19 crisis.
“We have set aside R800 million, that’s what we are using to assist SMMEs who are in distress and have a possible turnaround plan to get things going,” said UIF commissioner Teboho Maruping.
Employment and Labour Minister Thulas Nxesi said government was looking at decentralising the processing of UIF payments to workers who would claim from the fund as a result of the fallout from COVID-19.
They are exploring the utilisation of companies and bargaining councils as pay-out points through monies advanced to them in anticipation of an increased number of claims.