DOL-PRESENTATION TO DOH-SCIENTIFIC WORKSHOP ON RISK ASSESSMENT SUNNYSIDE PARK HOTEL 31 JULY 2013

DOL- PRESENTATION TO DOH-
SCIENTIFIC WORKSHOP ON RISK
        ASSESSMENT

   SUNNYSIDE PARK HOTEL
       31 JULY 2013

Overview of the presentation
•    Compensation Fund in South Africa
•    Governance of the Fund
•    Mission of the Fund
•    Revenue generation
•    COIDA Benefits
•    Guiding principles
•    Objections
•    Rehabilitation and re-integration
•    Proposed social security reforms
•    Challenges

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THE COMPENSATION FUND

• Social insurance within the social security system in South Africa
• Administered under the Compensation for Occupational Injuries
  and Diseases Act, 130 of 1993, as amended in 1997 (COIDA)
• It is a schedule 3 Public Entity i.t.o the Public Finance Management
  Act- in the Department of Labour
• Minister is Executive Authority
• The Director-General is the Accounting officer
• The Compensation Commissioner (DDG) reports to the DG

                                                         3

Governance of the Compensation Fund-
Compensation Board

• The Compensation Board is an advisory body
• The CF Board consists of organised business, organised
  labour, government and medical fraternity
• The Board advises Minister of Labour on policy matters,
  amendments to the Act, annual increases in benefits,
  appointment of assessors
• Director-General (DG) may request the board to investigate any
  issue relating to the operations of COIDA
• The Compensation Commissioner is delegated by the DG to
  administer COIDA

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Mission
To compensate employees for disablement

 caused by occupational injuries/diseases
  sustained/contracted
 in the course of their employment
 or their dependents for death resulting from such
  injuries/diseases
 and to pay the reasonable medical expenses
  incurred.

                                         5

The Revenue of the Compensation Fund

• All employers must register with the Compensation Fund, over
  400 000 active at present
• The revenue of the Compensation Fund consists mainly of
  annual assessments paid by the registered employers on the
  basis of a percentage of the annual earnings of their
  employees. This rate is fixed per industry subclass
• Levies calculated based on the earnings (salaries) submitted by
  employers multiplied by standard rate per subclass
• The Act makes provision for a minimum assessment to ensure
  that the assessment is not less than the administration costs
• Employers pay direct into CF accounts
• Employers are obliged to pay within prescribed time frames (30
  days of invoice date), which qualifies them for Letters of Good
  standing

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Revenue Conti…
Definition: “any person, including the State, who employs an
employee……”
State is exempted from paying assessments however, they pay
administration costs

Obligations of employers:
• Register as an employer
• Keep record of employee’s earnings
• Furnish annual Return of Earnings
• Pay annual Assessment
• Report all alleged accidents/Occupational diseases on duty
• Furnish all requested outstanding documents/information.
Failure to comply: penalties

                                                    7

MUTUAL ASSOCIATIONS

Rand Mutual Assurance Company Ltd – mining industry.

Federated Employers Mutual Assurance Company Ltd –
construction and building industry.

Operates under license from the Minister of Labour

Permission is given for employers to register/transfer to mutual
associations

                                                  8

High level business process

Revenue generation process

 Register           Issue return       Receive return
                                                        Assess employer
employer             of earnings        of earnings

    Issue invoice                  Employer pays

                                                        9

COIDA BENEFITS
Benefits are paid to employees, employers (refunds), dependents,
medical providers

Definition: “Employee is any person who has entered into or
works under a contract of service with an employer. The contract
of service can be in writing or oral, expressed or implied.
Temporary/casual workers, employed for the purpose of the
business– covered. Domestic workers in a private household-
NOT covered (will be with amendments)

Benefits are for both occupational injuries and diseases

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Temporary Total Disablement (TTD)
75% x(minimum/maximum salary)

Section 47(3)(a)
      Employer liable for payment of compensation for the
      first 3 months.
      After 3 months – Fund pays employee until he is
      declared fit

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Permanent Disablement (PD):
Up to 30% - lump sum-15 x (minimum/maximum salary)
1 – 29% - calculated proportionally

100% Pension
75% x (minimum/maximum salary)
31-99% PD:
 75% x (minimum/maximum salary) calculated proportionally
Payable for life
Increased annually based on CPI

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Widow/er:
Lump sum
        Min/max salary x 75% x 40% (more than one widow/er, they share)
        2 x monthly pension the deceased employee would have Monthly
        Pension
Children
Monthly pension
        20% x 75% x (min/max salary)
       Until 18 years old
       Extended – secondary or tertiary education
       Maximum : 60% (three cildren)
W.Ac. 22 – life certificate to be submitted annually
Also increased annually

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• Burial expenses
    2012 – R13 716.00
    2013 – R14 539.00
• Assistive devices
  Need for such medical aid is determined by the CF
• Chronic medication
• Constant Assistance Allowance

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MEDICAL BENEFITS

•   Employee has free choice of doctor
•   Doctor determines nature and extent of treatment
•   Compensation Fund pays reasonable medical aid
    related to injuries sustained for a maximum of two
    years

•   Need for, nature and sufficiency of medical aid decided
    by the Compensation Fund

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High level business process

Claims processes

                           Assess
Register
           Adjudicate   compensation        Calculate award
 claim
                          payable

                        Employee
                                             Review
                         objects

                                             Hearing

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Main guiding principles of COIDA
                 • No damage are recovered by employees against
                   employers
                 • Employees covered even for willful misconduct if
   No fault        serious injuries resulted in death
                 • Employee can claim from employer if the accident
                   was due to employer’s negligence

                 • All injuries or diseases must be caused by
                   employment
     work-       • COIDA is the exclusive remedy for occupational
                   injuries/diseases in SA unlike in N. Zealand;
  relatedness      Switzerland, Netherlands etc.
                 • Similar to Germany, USA; Canada; Israel and others

 Risk based to   • Employers are rated according to their risk profiles
                 • Incentive for employers to improve occupational
 improve OHS       health and safety standards
                 • Compliance by employers to OHS results in less
   standards       accidents

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Objections to Decisions taken by the
Commissioner

• Any person affected may lodge an objection
• Should use prescribed form WG 29
• Lodge objection within 180 days of date of decision
• Objection heard by Presiding officer and two assessors-one
  representing employees and one representing employers
• If dispute is medical, a medical assessor sits in
• COIDA tribunal decisions are appealable to the Supreme court
  having jurisdiction

                                                18

Rehabilitation, Re-Integration and Return to Work
 Policy Framework

Currently, the CF is working on Rehabilitation, Re-integration and
Early Return to Work policy.

PROGRESS
• The policy framework has been developed
• The amendment of the current COID Act is underway to make
  provision for the policy on rehabilitation, a chapter has been
  added
• A policy is being developed to support the new chapter in the
  Act

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Social Security Reforms

• Compensation Fund, thus DoL, is a member of the Inter
  Departmental Task Team (IDTT) on social security reforms in
  the country
• CF has given inputs to RABSA and NHI
• COIDA amendments is also meant to accommodate these
  reforms
• There are benefits in ensuring alignment of entities dealing with
  social security

                                                  20

COIDA Key challenges

•   Fragmented compensation systems –ODMWA and COIDA
•   Under-reporting of accidents/ diseases/ or delays
•   Inadequate enforcement of COIDA
•   Centralised system- no direct examination of patients
•   Over servicing by some health care providers
•   Exorbitant medical costs
•   Exploitation of injured employees receiving assistive devices
•   Portability of compensation benefits for non-citizens is still a
    challenge

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COIDA STATISTICS AS IN 2010

•   Registers an average of 210 000 to 220 000 per annum
•   Paid R1.8 billion for medical expenses
•   Paid a total of 329 091 benefits worth R801m
•   Had 430 000 employers in the database
•   R29 billion in assets for 2010 financial year

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Industries with highest number of
compensation claims

•   Air and transport- 50 018 compensation claims-
•   Agriculture and forestry- 24 774 claims
•   Iron; Steel and metal- 41 346
•   Building and construction- 24 865 claims
•   Food drinks and tobacco- 17 239
•   Personal services and Hotel- 21 667 claims
•   Trade and Commerce- 31 107 claims

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Thank you

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