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SALRC investigates possibility of maternity and parental benefits for the informal sector

In July of 2021, the South African Law Reform Commission (SALRC) released a media statement regarding Paper 153, Project 143 that aims to investigate the potential of government funding, via the UIF, in the form of maternity and parental benefits, for the self-employed informal economy workers in South Africa. Due to the nature of the way UIF is paid / collected, any self-employed worker is not required to contribute to UIF and as such are not able to submit any claim to UIF for a temporary or permanent loss of earnings. This 2nd discussion paper on the topic, resulting from the SALRC’s investigations focuses on identifying the gap in the current system of maternity and parental benefit mechanisms and how the gap could potentially be closed, and by whom. The paper contains questions for public comment, on or before 29 October 2021.

One major social factor underpinning the study is the understanding that the right to reproduction affects female worker far more than it does a male worker, simply as the result of gender and biology. It is understood that a self-employed female worker in the informal economy will be far more financially impacted by pregnancy than a male self-employed worker and that this would be a reason, which This results in further exacerbation of current gender inequalities which are already in play. The impact of this is that women are further disadvantaged because of their choices regarding reproduction and the resulting confinement period.

The discussion paper focuses on first defining the target group, (which does not include self-employed workers who are subject to any legal requirements, which apply when a business is registered, such as PAYE.) Thereafter the focus is on identifying the possible application of the benefits, to the target group. Having done so, it is proposed that benefits paid match the benefits currently afforded to employed workers, as defined by the LRA, because to provide fewer benefits, would be discriminatory. However, since there is no mechanism of contribution, as there is with UIF, the structures will have to be handled via other mechanisms. One such structure, which has been suggested, is via the existing CSG (Child Support Grant) which is already in play, and to either extend the application thereof, or to utilise this in conjunction with UIF, perhaps even partially or at different stages of the pregnancy and confinement period.

Factors for those who wish to comment would consider financial aspects which include the feasibility of the UI Fund being able to continually provide funding, in light of the current economic conditions in the country, ie the recent riots, Covid-19, exorbitantly high unemployment levels and the current additional drain that has already been placed on the UIF resulting from the payment of TERS resulting from the pandemic as well as TERS resulting form short-time or reduced hours (for reasons other than Covid). Similar would apply to the feasibility of the CSG and its capacity to extend funds for an extended 9-month period, or part-thereof.

Social factors to consider include the ever-widening gap between the formal and informal sectors as well as the inequality between genders in terms of ability to remain a part of the economically active population. As financial aspects worsen, the effect on society is heightened and so solutions must be earnestly investigated.