The Compensation Fund operates in terms of provisions of the Compensation for Occupational Injuries and Diseases Act (COIDA)of 1993.
Primarily the Fund’s role is to alleviate the plight of workers who get injured at work by making payments to such victims following definite criteria.
For the Fund to fulfil its mandate a sound financial base is indispensable.
During the financial year under review, the total revenue was R1092 601 000 which represents a 22,70 % increase compared to the preceding financial year.
Assessments levied in respect of registered employers increased from R792 685 000 in 1994/95 to R916 110 000.
This 15,57 % increase is a result of increases in earnings and rates, and also due to the fact that workers are covered in case they are injured at work irrespective of their earnings.
In the year under review, the number of assessments raised was lower, 239 205 in total compared to 240 401 during 1994/95 financial year.
Another setback relates to the decrease in the number of registered employers especially when we are still confronted with the problem of employers who undermine the system by deliberately not registering.
The decrease recorded was from 220 257 in the previous year to 217 471. The Department is doing its utmost to ensure that these culprits are brought to book though costly in terms of utilisation of human resources.
The problem is further compounded by employers who fail to pay assessments due and thus compelling us to take legal action.
During the financial year under review 2 900 court orders were issued against such employers, involving the total amount of R25 408 000, which represents 30,82 % increase compared to the previous financial year.
Several employers were penalised for various violations such as failure to report accidents, incorrect return of earnings, late or non-rendition of return of earnings and non or late payment of assessments.
The net yield from such penalties and interest payable amounted to R26 817 000. Expenditure of the Fund increased from R597 911 000 in 1994/95 to R693 893 000 in 1995/96 financial year.
Payments made for temporary and permanent disablement increased by 16,31 % amounting to R300 805 000.
Medical aid increased from R268 381 000 to R353 278 000 partly due to negotiated tariff increases.
The rise in hospital tariffs by 8% and private hospitalisation by 25% is of great concern as private hospitalisation takes up more than 40% of the total cost of medical aid for the Fund.
There was an increase of 14,67% in the number of accidents reported in 1995, viz 267 308 compared with 233 102 in 1994 for all risk carriers. The 1995 figure includes claims reported by the ex-TBVC states and 21 269 claims files from the ex-TBVC states were received and captured on record.
A total of 235 302 accidents occurred during 1992, being 3,26% lower than the 243 222 that occurred in 1991.
The number of awards increased by 7,56%, compared to the 13,40% increase of the previous year. This increase was mainly in the number of medical awards, which rose from 666 461 to 725 349, an increase of 8,84%. The number of awards for Compensation decreased by 1,08%, from 98 406 to 97 339. Medical awards constituted 88,17% of all awards.
The rate of increase in the cost of accidents was 12,62% in 1992, after an increase of 24,14% the previous year. The cost of accidents that occurred in 1992 was 567 382 487 for all carriers, compared with R503 789 519 for accidents in 1991.
Costs for the Compensation Fund continued to increase, although the rate of increase was not as high as the 34,15% observed for 1991. In 1992 costs increased by 7,33% to an amount of R371 969 864, as against the R346 574 131 that occurred during 1991.
The increase in the average costs for the Compensation Fund of accidents that occurred during 1992 was 9,65% , as against the increase of 33,74% during the previous year. The average cost per claim for the 1992 accidents amounted to R2 046,10, as against the R1 866,10 of the previous year.
The number of man-days lost in respect of the 1992 accidents was 21 198 564 as against 20 963 395 in respect of the 1991 accidents. This represents an increase of 1,12%, as against the decrease of 8,63% of the previous year.
The assets and liabilities of the Fund are valued by an actuary in terms of section 17 of the Act as the Commissioner considers necessary, but at least once every three years.
According to the latest actuarial valuation on 9 May 1994, the funds were in a sound financial position.
In line with the Mission and Vision of the Department, the Fund has adopted a new Strategic approach in 1997. The new approach is underpinned by these key strategic objectives:
1. Closer co-operation with Occupational Health and Safety to promote public awareness on health and safety matters. 2 To co-ordinate the activities of NOSA and Occupational Health and Safety in respect of services provided by the Fund.
3. Maintain a healthy cash flow and sound financial position of the Fund and improve debt collection.
4 Reduce potential for fraud
5. Compensate employees within a reasonable time after the accident
6. Contain medical costs.
7. Pursue and penalise employers who fail to report accidents timeously.
8. Place emphasis on service delivery by reducing claims processing period.
9. Conduct education campaign on the basics of COIDA and procedures of claiming Compensation Fund benefits.
Issued by: BONGI MAGOJO COMPENSATION FUND COMMISSIONER DEPARTMENT OF LABOUR
3 SEPTEMBER 1997 Contact No.: (012) 3199276/458 Cell:0826558135
Copies of the report can be obtained from: Ms N P Moshoeshoe Tel: (012) 309-4447