Compensation Fund sitting on R27.6 billion while thousands of people wait for help

The Compensation Fund Commissioner, Shadrack Mkhonto, recently stated on Talk Radio 702 that the Compensation Fund's total asset value had grown to R27.6 billion by the end of last year. At the same time, the Commissioner conceded that certain beneficiaries were finding it difficult to access funding from the Compensation Fund.

By March 2011, the last date for which we have reliable statistics, the Compensation Fund had 70 000 unprocessed applications.

This is not acceptable. The Compensation Fund exists to help those workers who get sick or become injured at work due to the negligence of an employer. It provides injured workers with compensation for their medical expenses and compensation for loss of income. It is an important part of the social safety net.

I will write to chairperson of the Portfolio Committee on Labour, Alec Nchabeleng, to request that Mr Mkhonto come before Parliament to explain what he aims to do to rectify the situation. It is not right that the Compensation Fund sits on an ever-growing portfolio of investments whilst thousands struggle to access the funding they are dependent on for their daily survival.

In the last three years since 2009, the Compensation Fund's net asset value has ballooned from R21.4 billion in 2009 to R24.6 billion in 2010 and then to R27.6 billion in 2011. At the same time it is estimated that two-thirds of approved claims are not paid out in the year that the request is made. The Compensation Fund's annual report for 2010/2011 indicates that only 67% of approved claims received during this period were actually paid out in that timeframe. 33% of the claims were therefore only paid out in the next year.

The Compensation Fund has set its target turnaround time to three months after a claim is registered. It is clear that it is not meeting this target consistently. The statistics for the year ended in March 2011 show that 30% of new claims take longer than three months to process - which means that roughly 60 000 people waited for more than three months before they received their money.

And the results are clear. The Democratic Alliance (DA) has received a great deal of correspondence from ordinary citizens asking for help with the processing of their claims. We are assisting these people in every way we can, but the reality is that the problem can only be resolved once the Compensation Fund gets its house in order.

Mr Mkhonto should come to Parliament so that we can seek solutions to this problem together.

Statement issued by Sejamothopo Motau MP, DA Shadow Minister of Labour, March 1 2012

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