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Speech by Deputy Minister of Labour, Nkosi Phathekile Holomisa (Ah! Dilizintaba)MP at Universal Social Protection USP2030 at the IV Global Conference on the Sustained Eradication of Child Labour in Buenos Aires, Argentina

by lloyd last modified 2017-11-17 10:43

15 November 2017

Towards Universal Social Protection: Experience from the Republic of  South Africa

I am honoured to be part of this side event of the IV Global Conference on Sustained Eradication of Child Labour focusing on Universal Social Protection USP2030. South Africa appreciates the opportunity to share its experiences on this important subject.

In 2012, our Government adopted the National Development Plan (NDP), Vision 2030, which aims at eliminating poverty and reducing inequality. The NDP states that social protection should (i) contribute to ensuring that no-one slips below a minimum standard of living, and (ii) play a transformative and developmental role in the country.
Our NDP is consistent with the Sustainable Development Goal 1.3 on implementation of nationally appropriate social protection systems and coverage of the poor and vulnerable.
 Our efforts have positively impacted millions of beneficiaries and their households.

The NDP affirms our commitment to the achievement of a social floor for the improvement of the minimum standard of living for everyone. Although work is ongoing to define the floor, there are several existing elements that constitute the South African social floor. Such elements of social protection provisions include basic essential social rights and transfers in cash and in kind that provide minimum income and livelihood security, as well as essential basic services such as water, electricity, sanitation, health care and education available to all those in need.

One of the important lessons from South Africa is that the Constitution takes a human rights approach in section 27, stating that everyone has the right to health care, food, water and social security.  Government has a constitutional obligation for the progressive realisation of these rights.

Since the dawn of democracy, South Africa has been reforming social security provisions, which include social assistance and social insurance. The post-apartheid government inherited a highly fragmented and racialized system of social security which excluded the vast majority of citizens.  It was necessary for the new democratic government to find ways of including the majority of South Africans who were previously excluded.

South Africa’s social assistance (“social grants”) programme, administered by the South African Social Security Agency (SASSA), is one of the most effective and extensive poverty alleviation programmes, providing a social safety net for all South Africans, reaching about 17 million beneficiaries, including the young, elderly and disabled. This programme includes grants such as the child support, care dependency, foster care, disability, grant-in-aid, war veterans and older persons.  Spending on this priority is set to rise from R164.9 billion = $11.370 billion in 2016/17 to R209.1 billion = $14.404 billion by 2019/20, growing at an annual average of 8.2 per cent over the medium term. Beneficiaries are expected to reach 18.1 million in the 2019/20 financial year (National Treasury, Budget Review 2017).
Despite being a means-tested grant (accessed at the age of 60 for both men and women), currently the older persons grant reaches close to 3.4 million older persons, paying R1600 = $110.26 (for those aged between 60 – 74), and      R1620 = $111.67 (for those above 75 years) (2017/18). Government is considering to universalise the grant and several options are proposed in terms of the age cohorts. The child support grant reaches about 12.4 million children, being paid, R380 = $26.19 in 2017/18 financial year. The value of the grants is periodically adjusted considering the cost of living.

Social protection interventions in South Africa prove to be effective interventions to address poverty and inequality challenges, especially to the most vulnerable members of our society. Our social protection measures help to empower households and improve the wellbeing of children and other beneficiaries, and their communities. Social grants are a reliable source of income, shared within households (sometimes with up to six persons or more in a recipient’s household).   School attendance in households with recipients of the child support grant has significantly improved over the years. Empirical evidence also shows that chances of getting a job have improved for those in recipient households. Social assistance has over the years assisted families and children including those who are orphaned due to HIV and Aids. There are many families that would not be able to put food on the table if it was not for the social grants. 

The South African government also has a comprehensive Social Insurance offering in line with the constitution. This area covers Unemployment Insurance Fund (UIF); Compensation Fund (CF) and Road Accident Fund (RAF). These are all contributory funds in nature in that there are contributions collected to fund the interventions.

The Unemployment Insurance Fund (UIF) was established to provide short-term relief to workers, subject to certain conditions, when they become unemployed, or are unable to work because of illness, maternity or adoption leave, and also provides relief to the dependents of deceased contributors.

The Fund is financed through the 2% monthly contributions made by employers and workers. The income from contributions is used to pay benefits, fund poverty alleviation schemes, and fund socially responsible investments that prevent job losses and in most cases lead to job creation, and have a high social impact.
The Fund’s efforts continue to have a positive impact on the majority of the unemployed UIF contributors. From April 2017 to September 2017 the Fund approved 319 933 unemployment benefit claims amounting to                              R3,7 billion = $255 054 million. The Fund pays between 10 000 to 15 000 claims per day at a cost of R 35 million = $2 412 million to R39 million = $2 689 million per day.

The Compensation Fund (CF) provides medical care and income benefits to workers injured on the job or who develop occupation-related diseases. They also provide survivor benefits to families of victims of job-related fatalities and funding for vocational rehabilitation of disabled workers. Costs are recovered through levies on employers, at rates that depend on a firm’s risk profile and accident record. This arrangement encourages employers to improve workplace safety.

In terms of cost and volumes Medical Benefits constitute about 71%, which amounts to R2.9 billion = $199 920 million; followed by Pensions Benefits at                         R1 billion = $689 826 million which is 25% of the claims paid and                         R152 million = $10 485 million goes towards paying Compensation Benefits which constitute 4% of the pie. Volumes drivers are Compensation Benefits with an average of 130 000 processed per year and Medical Benefits at 530 000 per year.

The Road Accident Fund (RAF) is a mandatory 3rd party insurance arrangement financed by a dedicated fuel levy. It provides compensation for loss of earnings, along with general damages, medical and funeral costs, to victims of road accidents caused by the negligent or wrongful driving of another vehicle. In September 2011, Cabinet approved the Road Accident Benefit Scheme (RABS). It will provide for a more equitable, affordable and sustainable system of benefits that conforms to the right to social security and health care established in the Constitution.

As I conclude, in South Africa we have witnessed the impact of social protection interventions since the dawn of democracy. We acknowledge that there are still some gaps that we need to address for us to realise the NDP Vision 2030 and the SDG 1.3 by 2030; to this end the South African government has recently reviewed the Unemployment Insurance Fund to cater for civil servants and people on internship. Part of the amendment includes extending the benefit period for unemployment benefit to 12 months, and also allows the Minister of Labour to avail funding for Labour Activation Schemes to deal with the unemployment impact on the society.

Our Government remains committed to engage our social partners on a number of issues. Currently, among others, Government is in discussions with social partners at NEDLAC on a number of social security reform proposals including universalisation of the older persons grant and the introduction of mandatory earnings-related contributory social insurance scheme that provides pension, death and disability benefits. Introducing the latter is being considered to provide adequate and affordable benefits, and pool risk across the whole workforce and achieve social solidarity, complementing both non-contributory social assistance and private schemes.

Social protection is for all.

Thank you.

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