Public comment open for UIF proposal
The public is invited to comment on a proposal to temporarily reduce employers and employees’ contributions to the UIF.
THE proposal for temporary reduction in Unemployment Insurance Fund (UIF) contributions is open for public comment until 20 March.
The move is being spearheaded by Finance Minister Nhlanhla Nene and calls for a temporary drop in employers’ and employees’ contributions to the UIF, while keeping benefits unchanged.
In the 2015 budget speech, the minister proposed to reduce the remuneration threshold against which the contributions are calculated from the current monthly amount of R14 872 to R1 000.
Given the challenging economic environment that has led to downward revisions in economic growth, a cut in unemployment insurance contributions will provide significant support to households and employers.
The reduction is proposed to take effect on 1 April, and would be reconsidered for the next fiscal year, shortly before 1 April 2016. If implemented, both employers and employees will be required to pay a maximum of R10 each per month, down from the current maximum of R148.72.
The Minister’s proposal would provide much-needed support to the economy, putting about R15- billion back into the pockets of workers and employers. The reduction would draw down on the UIF’s accumulated surplus which currently stands at more than R72-billion. This in turn will stimulate the economy without requiring national government to issue additional debt.
The Unemployment Insurance Contributions Act of 2002 enables the Minister of Finance to adjust the contributions made by employers and employees, while the Unemployment Insurance Act of 2001 enables the Minister of Labour to adjust benefits.
Comments should be emailed to uif@treasury.gov.za or fax submissions to 086 7418648 by 20 March.
