The Ministry of Finance and the Social Security Commission in a combined effort announced the rolling out of a relief package, aimed at mitigating the impact of COVID-19 on various sectors of the economy.
- The efforts were combined to ensure effective utilization of state resources. In this regard, the Ministry of Finance is availing an amount of N$400 million, while the SSC is making a cash contribution of N$253 million to the scheme. In addition SSC is granting a contribution holiday of three months to the selected affected industries.
As part of the ongoing response from the Government of the Republic of Namibia, the Ministry of Finance announced the National Employment and Salary Scheme for COVID-19, in an effort to save jobs and reduce potential impact on employment due to the pandemic. The scheme encompasses the following two objectives:
- The Employer Wage Subsidy Program for the hard hit industries under three (3) sectors of aviation, tourism and construction. This program is designed to save jobs. The program is driven by the following characteristics:
- Employers of affected industries will receive a subsidy based on their total wage bill, driven by an SSC contribution waiver and a cash injection from the state. The aim is to give employers a cash subsidy of 17% of their total wage bill and SSC contribution holiday, or both for a period of three months.
- Prospective beneficiary employers should agree not retrench staff for the three (3) months and should not be allowed to reduce staff salaries by more than 50%.
- 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 (FIDIC or insurance).
- The program is designed to potentially assist 7,900 employers employing 65,420 employees. The program is budgeted to receive N$150 million which when combined with the waiver, should equate to ~25% of the total wage bill.
- Any amounts left over can be used in the Affected Employees program noted below.
- The Affected Employees program invites persons to apply for a grant designed to provide compensation for those who have lost income. This program is designed to provide a safety net for those who have been adversely impacted by COVID19. Features include:
- Applicants should have been registered with the SSC as at 1 February 2020.
- Applicants should be able to prove loss of income related to COVID19
- Applicants should earn less than N$50,000 p.a.
- The benefit will be limited to 50% of monthly salary, subject to a minimum of N$1,000 per month for 3 months.
- The benefit will be net of other benefits received from the state (e.g. Emergency Income Grant )
- Using these parameters and a budget allocation of N$350 million this program could cater for between 56,000 to 117,000 applicants
- Modalities around the registration process, payment logistics and relevant information on the scheme will be communicated and managed by the Social Security Commission and will be announced in due course.
- To avoid major retrenchments and business closures, employers including Government and business owners will be allowed to negotiate a temporary 20% reduction of salaries and wages during the crisis period, and 50% for the worst-hit industries. The negotiations will be undertaken through a consultative process with employees and labor unions.