As part of ongoing government efforts the Ministry of Finance on Monday allocated N$400 million, while the Social Security Commission (SSC) gave N$253 million to the National Employment and Salary Scheme for Covid-19 relief measures.
The scheme, through which SSC has also granted a contribution holiday of three months to affected industries, is an effort to save precious jobs and reduce the potentially devastating impact on employment due to the pandemic. “The scheme will serve a dual purpose, firstly, to discourage employers from retrenching employees in the short-term and, secondly, to provide support for individuals who suffered a loss of income as a result of Covid-19,” said finance minister Iipumbu Shiimi at the launch of the scheme.
The much-anticipated scheme encompasses two main objectives, the first being the Employer Wage Subsidy Programme that will focus on the hard-hit industries of aviation, tourism and construction.
Through this programme, employers of affected industries will get a subsidy based on total wage bill, driven by an SSC contribution waiver and a cash injection from government. The aim is to give employers a cash subsidy of 17% of their total wage bill and an SSC contribution holiday, or both for a period of three months.
Shiimi said through the programme prospective beneficiary employers should agree not to retrench staff for three months and should not reduce staff salaries by more than 50 percent.
He added that any benefits to be received should be netted against any claims the employer in question may have received from the state or other forms of compensation, including insurance.
The programme will potentially assist 7 900 employers with 65 420 employees. The programme will receive N$150 million which when combined with the waiver, should equate to approximately 25% of a company’s total wage bill.
Said Shiimi: “This programme is designed to provide a safety net for those who have been adversely impacted by Covid-19.”
To benefit from this programme, applicants earning less than N$50 000 per annum should have been registered with the SSC as at 1 February 2020 and should be able to prove loss of income related to Covid-19.
This benefit will be limited to 50% of monthly salary, subject to a minimum of N$1 000 per month for three months. Using these parameters and a budget allocation of N$350 million this programme could cater for between 56 000 to 117 000 applicants.
“The ministry envisioned a wage subsidy programme since the commencement of the Covid-19 economic response efforts. During the stakeholder consultations, it came to light that the Social Security Commission (SSC) has been mooting the same. The efforts were combined to ensure effective utilisation of state resources,” Shiimi stated.
The SSC has a database of over 43 000 employers, comprising more than 372 000 employees, which places it in a perfect position to be an implementing agency for the scheme.
“This database will serve as the key population from which potential recipients of relief will be sought. Contributions to the social security is a legislative requirement. Those that are not in compliance with the law should not be considered beneficiaries of these programmes,” stated Shiimi.
Also present at the launch of the scheme, SSC executive officer, Milka Mungunda, said: “It was important that we designed a programme that included the key elements of both programmes envisioned by the key stakeholders, the government and the Social Security Commission.”
Modalities around the registration process, payment logistics and relevant information on the scheme will be communicated and managed by the Social Security Commission and are expected to be announced in due course.