South Africa’s Unemployment Insurance Fund (UIF) system remains severely dysfunctional, with a decommissioned online portal continuing to accept claims and issue reference numbers while processing no applications, Portfolio Committee on Labour and Employment member Michael Bagraim has revealed.
The outdated portal, which was supposed to have been taken offline years ago after the UIF migrated to a new electronic filing system, is still active. Applicants unknowingly submit their claims into what Bagraim described as a “black hole,” receiving official reference numbers but receiving no further response or payment.
“This has been going on for years,” Bagraim said. “The UIF is so dysfunctional… people are picking up a toy telephone. They’re sending information which is going nowhere and no one will ever answer you.”
Bagraim emphasised that the UIF consists of workers’ own contributions, not government funds, serving as a critical lifeline for those who have lost jobs, been retrenched, or suffered the death of a working family member. He highlighted the distress caused to pregnant mothers and retrenched workers who are unable to access benefits despite the fund being well-resourced.
“The money is there,” he said. “The Department of Employment and Labour keeps raiding the UIF… but the people never get it.”
Bagraim noted that even the current official portal delivers poor results, with many applications seemingly ignored. He revealed he has personally written to the acting commissioner of the UIF more than 10,000 times, keeping records of the complaints, many of which remain unresolved.
The UIF has reportedly failed its audits for nine consecutive years. Bagraim and the Democratic Alliance (DA) have repeatedly called for the function to be transferred to the South African Revenue Service (SARS), which they describe as a highly functional organisation already holding relevant employer and contribution data.
“Businesses pay the UIF into the revenue service. SARS has the information… they can actually sort it out quickly,” Bagraim stated. However, Minister of Employment and Labour, Thembi Meth, has so far refused to implement this change despite ongoing representations, including one raised by Bagraim in Parliament last week.
Bagraim called for the immediate closure of the decommissioned “phantom portal” to prevent further lost applications. He expressed uncertainty about how long the invalid system has been accepting claims or whether any records of submissions have been kept.
“We don’t know if they’ve kept records. We don’t actually know whether it’s just going into the ether and disappearing,” he said. “There might be thousands of South Africans who are hopeful that they’re going to get their UIF, but it’s gone nowhere.”
The portfolio committee has also raised concerns about the recent establishment of the UIF as a standalone entity, which has so far produced no visible improvements despite significant spending.
Bagraim described the situation as “tragic,” noting South Africa’s high unemployment rate and the large number of retrenchments, saying affected workers who contributed throughout their careers cannot access their money. He stressed the need to hold the minister accountable for the failures.