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South Africa Proposes Mandatory Welfare Fund Contributions

  • Fund seen providing unemployment, retirement benefits
  • Proposals markedly deviate from current budgetary framework
Enoch Godongwana replaced Mboweni as finance chief on Aug. 5.

Enoch Godongwana replaced Mboweni as finance chief on Aug. 5.

Photographer: Foto24/Gallo Images

Updated on

South Africa should impose compulsory levies on companies and workers to create and capitalize a public social welfare fund, the Department of Social Development proposed.

All employers and workers should contribute as much as 12% of their earnings to set up a fund that could provide unemployment, retirement and disability benefits, the department said in a so-called green paper on social security and retirement reform. Levies should be mandatory for those earning at least 276,004 rand ($18,190) a year, the current ceiling for unemployment insurance contributions, and the government should subsidize low-income workers’ dues, the department said.