Govt to determine if workers can dip into retirement funds

Govt to determine if workers can dip into retirement funds

Finance Minister Tito Mboweni says a process is underway to see if it will be possible to allow workers early access to a portion of retirement funds to pay off debts.

Finance Minister Tito Mboweni 28 july

He was speaking during a briefing on Wednesday on relief measures to support South Africans as the Covid-19 pandemic continues to affect livelihoods and impact the economy.

"It is a matter that has been discussed at NEDLAC and I am now determined more than ever before to ensure that the officials in the national treasury and other relevant officials speed up this matter.

"A portion of their retirement fund, workers should be able to access in is difficult times. Maybe to finish off their bond repayments. Maybe to sort out whatever dept position they might be in."

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But the minister has warned if retirement funds are accessed, the money should be used responsibly.

Meanwhile, Treasury projects the country's economy will only be able to go back to the pre-Covid growth in about two years' time.

"The impact of the restrictions occasioned by Covid-19 has had obviously a very serious negative consequence for the South African economy.

"The recent disturbance and unrest had a major impact on our society, economy. This had impacted very negatively to our economy recovery trajectory."

Mboweni says the temporary extension of the R350 Social Relief of Distress Grant announced by the President over the weekend will cost about R27 billion.

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"Really this is meant to react to respond to the dire situation in which most of our people find themselves. You drive around the country, walk around the country and you are bound to notice the extreme poverty in which our people live."

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