Compensation Fund admits system is shambolic

By Wiseman Khuzwayo Compensation Commissioner

Despite a promise last year by Labour Minister Mildred Oliphant that the implementation of the Compensation Fund turnaround strategy to improve and fast-track service delivery was at an advanced stage, the fund admitted yesterday that it was still in a lamentable state.

The fund is managed by the Labour Department and provides cover for workers who are injured, contract an illness or die at work.

A new information technology system was introduced last year. However, deputy director Nthatane Molefi said the fund’s online portal for companies to submit return on earnings (RoE) forms was working very slowly, so payroll consultants and tax consultants were resorting to calling the call centre. As a result its lines became clogged.

She said this pressure on the call centre agents resulted in them spending 15 to 20 minutes on one call.

The deadline for the submission of RoE forms is April 30.

Companies must submit the RoE forms annually to have their contributions determined, based on the size of the workforce and salary bill.

Rodney Gibbs, a tax practitioner, said he had been unable on several occasions to get through to the call centre because the line was constantly engaged even when he phoned at 7.31am, one minute after it is supposed to open.

Gibbs said: “The call centre is not functional. The labour minister should be answering questions.”

He said incentives offered by the fund for submitting RoEs online before the deadline were meaningless because of the problems facing the fund.

Those who submitted forms before April qualified for the following incentives: 10 percent discount on assessments settled within 30 days; 5 percent discount on assessments settled within 60 days; and 2 percent discount on assessments settled within 90 days.

The online portal of the fund was supposed to have been decentralised to the regions last year but Molefi admitted this still had not happened.

She said the call centre would employ 45 new agents next week, in addition to the current 47.
“We are facing a challenge. Some people are on leave, while others are writing exams. While we train new agents, we lose others through attrition,” Molefi said.

Oliphant said in her budget vote speech in May last year that with the turnaround strategy in place, it was projected that R3.2 billion in compensation benefits would be paid by the end of that financial year.

The fund has investments worth R28bn and reserves of R15bn, but even with so much cash in hand, the fund has been hopelessly inefficient at paying service providers on time.

Last month some occupational heath doctors said they were refusing to treat state patients since the fund made payments late, and these now appeared to have dried up.

The auditor-general found that the fund suffered from a poor service culture, lack of skilled staff, inefficiencies, inadequate systems and fragmented business processes.

In February Labour director-general Nkosinathi Nhleko told the labour portfolio committee “the fund cannot continue to function in the same manner it has over the last decade”

Published with the kind courtesy of Business Report


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