Financial Mail and Business Day

Treasury questions feasibility of proposed maternity support grant

Kabelo Khumalo Companies Editor

The National Treasury has expressed doubt on the feasibility of the proposal put forward by the SA Law Reform Commission advising the government to introduce a maternity support grant for poor pregnant women and to extend the benefits of the Unemployment Insurance Fund (UIF) to self-employed workers.

“Treasury appreciates these proposals but it is necessary to cost proposals at the time of development as it would have significant financial impacts on the resources available in the fiscus, given the current economic climate, but also for the UIF and the Compensation Fund and current contributors to these funds,” the Treasury told Business Day.

“The discussion paper is not clear on how contributions would be sourced from prospective beneficiaries given that the informal nature of their work would make it difficult to trace UIF contributions for financing. It will be difficult for the UIF to ascertain the appropriate level of support without verifiable incomes for informal workers.”

Business Day reported on Tuesday that the commission had recommended the introduction of a maternity support grant for poor pregnant women, putting the cost at about R3bn a year.

The commission is recommending the existing child support grant be extended to all eligible poor and vulnerable pregnant women, including selfemployed workers in both the formal and informal economy, who fulfil the criteria for the grant.

A final report of the commission, tasked with advising the government on the development of the law, said the maternity support should be provided for six months of pregnancy and be registered in the name of the expectant mother. In addition, this help should be converted into a child support grant after the child is born.

The commission also recommends that a definition of “self-employed worker”, which includes own-account as well as wage workers, be added in the relevant sections of all the employment and labour legislation providing for state maternity and parental benefits.

In particular, the commission recommends the existing UIF system be extended by the department of employment & labour to self-employed workers so as to make provision for the extension of maternity and parental benefits outlined in the Unemployment Insurance Fund Act and Basic Conditions of Employment Act to all workers.

“With regards to the extension of the child support grant, the Social Assistance Act together with its legislation and regulations does not distinguish between types of employment or unemployment. An expectant mother who meets the income criteria will be eligible regardless of whether they are unemployed, formally employed, informally employed or selfemployed,” the Treasury said.

“However, the Unemployment Insurance Act is a contributory fund and as such would be financially constrained if benefits are not funded through contributions. Given the current fiscal constraints, it would not be possible for the state to fund any gap in benefits.”

The department of social development has supported the proposal.





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