IWAG alarmed by the sudden shut down of Compensation Fund’s systems

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The Injured Workers Action Group (IWAG) is alarmed by a notification from the Compensation Fund informing stakeholders that its system will be shut down from 15 – 31 March 2021. There has been no explanation for the shutdown, but is another indication of its dysfunctionality.

The shutdown takes place at the same time that the Department of Labour has notified domestic workers and their employers to register with the Fund. This stems from the November 2020 landmark judgment of the Constitutional Court ruling that employees who performed domestic work in the home of their employer and who suffered an injury or contract an illness while on duty must be included as beneficiaries of the Fund.

IWAG spokesperson, Tim Hughes, says: “While Government must be congratulated for including domestic workers as beneficiaries of the Compensation Fund, it only has value if the system works. It is widely recognised that the Fund is dysfunctional, and one cannot underestimate the far-reaching devastation this has on the lives and livelihoods of the injured, mostly blue-collar workers of this country and their families.”

While the Compensation Fund has assets of over R60bn, and more than R26bn in reserves, workers, employers and medical service providers find it extremely difficult to access the Fund’s systems. In October 2019, in an effort to simplify and expedite its claims process, the Fund replaced its previous IT system with a new SAP-based IT system called CompEasy, at a cost of R285m. This is the fifth IT system that the Fund has invested hundreds of millions in over the past 20 years. However, the new system is highly problematical and is exacerbating delays in the registration and adjudication of claims, and pay-outs. The failure of the Fund’s new system is such that, in a recent IWAG survey of employers, only 31% were able to successfully report an IOD incident.

Hughes added that this clear evidence of dysfunctionality only made it more imperative that Government’s proposed ban on the cession of medical service providers claims to third party service providers be removed from the proposed COID Amendment Bill, which is the same piece of legislation which will extend the benefits of the Fund to domestic workers.

Section 43 of the Amendment Bill prohibits the cession of medical invoices by medical service providers to any financial institutions and third party administrators as collateral for much needed working capital, equipment finance or practice needs.

Hughes said: “Given that medical service providers, who treat injured on duty patients in good faith, will not be able to cede their invoices to financial institutions or third-party administrators for timely payment or access to overdrafts, there is a real risk that their practices will be forced into financial distress or collapse if Section 43 is adopted. More concerning is that because of the financial risk, the introduction of Section 43 will discourage many health care providers from treating workers who are injured on duty, thereby significantly reducing the pool of care, and placing additional pressure on an already strained public healthcare system. For domestic workers, the inclusion of Section 43 will undermine the level of care they are being promised and remove the true benefits of being a beneficiary.”

Issued by The Press Office



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