Memorandum on the objects of the Unemployment Insurance Amendment Bill, 2013.

1. BACKGROUND

The Unemployment Insurance Act, 2001 (Act No. 63 of 2001) (the Act), came
into operation on 1 April 2002. The purpose of the Act is to establish an
Unemployment Insurance Fund (UIF) to which employers and employees
contribute and from which employees who become unemployed, or their
beneficiaries as the case may be, can benefit. In that regard, the harmful
economic and social effects of unemployment can be alleviated. In order to
improve service delivery by the Fund, the Unemployment Insurance Board
decided to recommend to the Minister that the Act should be amended so as to
meet these demands.

2. OBJECTS OF BILL

The Bill seeks to – —
(a) adjust contributor’s entitlement to benefits and extend the unemployment
insurance benefits so as to benefit the employees who are under contract of
employment contemplated in section 18(2) of the Skills Development Act, 1998
(Act No. 97 of 1998) and employees as defined in section1 of the Public Service
Act, 1994 (Proclamation No. 103 of 1994)
3. OVERVIEW OF BILL

Clause 1

The Bill seeks to amend section 3 of the Act by extending unemployment
insurance benefits to employees who are under contract of employment
contemplated in section 18(2) of the Skills Development Act, 1998 (Act No. 97 of
1998) and employees as defined in section 1 of the Public Service Act, 1994
(Proclamation No. 103 of 1994).
Clause 5

Section 13(3) of the Act provides that a contributor’s entitlement to
benefits accrues at a rate of one day’s benefit for every completed four days of
employment as a contributor subject to a maximum accrual of 365 days.
Clause 6

Section 13 is further amended by the insertion of a new provision which seeks to
allow contributors to claim benefits if they have credits regardless of whether they
claimed within that four year cycle.

Clause 8

The Bill seeks to amend section 15 of the Act so as to provide that the
date of unemployment is deemed to be the date of the application of benefits.
Clause 9

Section 17 is amended in order to increase the period of submitting application
for unemployment benefits. Currently applications must be submitted within six
months and the proposal is to extend the period for submitting unemployment
benefits from six to twelve months.
Clause 11

The Bill seeks to amend section 24 of the Act so as to provide for a period
when a contributor is entitled for maternity benefits in case of miscarriage.
Clause 12
The Bill seeks to amend section 25 of the Act and
provide for the application to be made within two weeks of the date of
commencement of maternity leave.
Clauses 13

The Bill seeks to amend section 26 of the Act by providing that the
maternity benefits must be paid at a flat rate of 66% of the last earnings of a
contributor.
Clause 14

The Bill also seeks to amend section 30 of the Act by extending a period
in which the dependents may apply for benefits on behalf of the deceased from
six months to 18 months.
Clause 15

Section 30 is further amended by the insertion of a new provision allowing
contributors to nominate their beneficiaries in cases of death benefits.

Related articles:

UIF Registration

MATERNITY BENEFITS

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Email: bernard@capelabour.co.za