Tag: fund

The UIF is not a ‘money tree’ – Nxesi

By Jason Felix for News24 

The Unemployment Insurance Fund (UIF) is not a “money tree” with unlimited resources.

That was the warning from Employment and Labour Minister Thulas Nxesi, who revealed on Tuesday that the UIF has around R50-billion available.

Nxesi delivered a ministerial briefing in the National Council of Provinces (NCOP) on the measures his department has taken to mitigate the Covid-19 pandemic.

Through the Covid-19 Temporary Employee Relief Scheme (TERS), over R49-billion had been disbursed in benefits in the form of over 11-million payments since the beginning of the lockdown.

Nxesi said R23-billion was disbursed in Gauteng, in five million payments, and R484-million was disbursed in the Northern Cape, in over 100 000 payments.

‘Mass unemployment’

At the same time, R7.5-billion was disbursed in 1.3 million payments in normal UIF benefits.

Nxesi said plans were afoot to ensure the sustainability of the UIF fund.

“We have about R50-billion available. The question we need to answer now is what is the way forward when we have to deal with mass unemployment? This is a serious matter that the UIF board is looking at.

“It is difficult at this stage to determine all the retrenchments. But if the worst comes to the worst, we might see ourselves in the 2008 situation, where we would have to appeal to government,” he said.

Nxesi said, while the UIF was repurposed, it also needed to build in the necessary financial controls.

“I said at the time, ‘we don’t start paying out benefits before controls are in place’.

“This led to initial delays, and complaints from employers that the conditions were too onerous – which, in turn, compromised UIF controls in the rush to get payments out to laid-off workers,” he said.

He also said the UIF was aware of the fraud risks with TERS payments.

Nxesi said:

In September, all Covid-19 TERS payments were put on hold after several allegations of corruption and complaints that employees were not receiving their monies.

Stopping the payments allowed the UIF to implement adequate controls and to mitigate the identified risks.

During the first payment run on 21 September, and after the suspension of the TERS payments, errors were detected and the payments were rejected.

Some of these included the rejection of 193 applications after it was found the applicants were deceased persons.

Nxesi said 1 688 government employees, who applied for TERS were rejected. Also rejected were two applications from inmates and 1 968 applicants with invalid identification numbers.

“The holes are being plugged. The UIF has received the correct master data from the Department of Home Affairs, which is the latest data, so no deceased employee will be paid.

“The risk of inflated salaries by employers has also been corrected as the UIF now verifies with the latest declared salary.
“All under-age ID numbers have been blocked on the system,” he said.

By Mikael Holter for Bloomberg

Norway plans to draw a record 382-billion kroner (R685-billion) from its wealth fund, forcing the world’s biggest sovereign investor to embark on an historic asset sale to generate cash.

The unprecedented withdrawal, revealed in Norway’s revised budget for 2020, is more than four times the previous record set in 2016. The development exposes the scale of the economic damage done by the twin crises of Covid-19 and a collapse in global oil markets, with western Europe’s biggest crude exporter now facing its worst economic slump since World War II.

For the first time, Norway’s government is set to withdraw considerably more than the $1 trillion fund generates in cash flow from dividends and interest payments. That income is assumed in the budget to be 258 billion kroner this year, meaning asset sales could reach 124 billion kroner, or around R222 billion.

“It’s obviously an historic event,” SEB Chief Strategist Erica Dalsto said. “But we’re also in a crisis that lacks historical parallels. This illustrates the double-whammy that’s hit the Norwegian economy, with repercussions from both containment measures and the oil-price collapse.”

Bond sales

With asset liquidation now an inevitability, the fund is likely to focus sales on its bond portfolio. That’s because it needs to increase its holding of stocks after the equity portfolio fell below a required 70% target of the total portfolio.

Norway’s government uses its oil wealth to plug budget deficits every year. Until 2016, the so-called structural oil-corrected deficit was covered by the state’s income from petroleum, namely taxes, stakes in offshore fields and dividends from Equinor ASA. As long as the government was generating a surplus, it could deposit money into the fund. In 2016 and 2017, deposits were replaced by withdrawals, as petroleum revenue dwindled due to a slump in prices. But the fund was still able to cover that easily with its cash flow.

In 2020, everything changed. The government now expects to spend a record 420 billion kroner of oil money on crisis packages to prop up its economy, with the collapse in petroleum revenue compounding the shock. The government predicts its net cash flow from petroleum activities will drop by 62% to 98 billion kroner, the lowest since 1999.

Norway has a self-imposed fiscal rule stating it should use no more than 3% of the fund’s value each year to plug budget holes. But it’s allowed to stray from that limit to help the economy during downturns. At 4.2% this year, spending will exceed the cap for the first time since the financial crisis in 2009.

By Jamie McKane for MyBroadband

The Department of Labour has launched a simplified online portal for applications to the UIF Temporary Employer-Employee Scheme (TERS).

This follows after problems were reported with the previous application process, which saw only 136 out of 39,000 applications successfully processed.

15 755 of these applications were duplicates, and of the remaining applications, only 16 534 were in the correct CSV file format. Of these, only 136 contained the correct information, said the UIF.

One of the biggest obstacles to completing the application process correctly was the requirement to submit a pipe-delimited CSV file, which requires Windows users to change settings in the Control Panel menu, according to instructions from the UIF.

New online applications
The UIF’s new online application portal aims to provide companies with a simpler method for completing TERS applications.

The online interface allows applicants to complete a series of online forms and register a profile on the department’s website.

This removes the need to submit a pipe-delimited CSV file as part of the application.

While supporting documentation is required – including a PDF confirmation of company banking details – applicants can now complete employee details one-by-one on the online platform.

How to apply
To begin the application process, users must visit the UIF TERS application portal.

From here, you can register a profile on the portal, supplying a username, password, email address, and contact number.

Once registered, you will be able to apply for TERS funding by entering your company’s information and banking details.

The TERS national disaster application system will then require you to accept memorandums of understanding (MOAs) before uploading confirmation of your business banking details.

You can then choose to upload a CSV file with employee details or add employees one-by-one directly on the portal itself.

After this step is completed, your application will be submitted and processed by the UIF.

It should be noted that the TERS national disaster application website is flagged by Google Chrome as “Not Secure”, due to its use of an outdated security system which the browser states may expose user information when it is sent to the website.

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