New Push for Domestic Worker Pensions in South Africa Gains Momentum

South Africa is seeing renewed calls for improved protections for domestic workers—this time with a strong push for access to pensions.

While the government’s 2023 decision to officially classify domestic workers as formal employees was a major milestone, labour unions argue it’s only the beginning. The Progressive Domestic Workers Union of South Africa (Prodwusa) now wants to see a nationally supported pension scheme introduced—one that ensures domestic workers can retire with dignity.

A Sector with Deep Roots—But Little Retirement Security

South Africa’s domestic work sector is one of the country’s largest employers. Stats SA estimates that around 850,000 people—most of them women—work as domestic workers. That’s roughly 5.2% of the national workforce.

Yet despite their contributions, most domestic workers retire with no financial safety net.

“Despite working many years and dedicating their lives to this work, most domestic workers retire with nothing or very little to show for it,” said Thato Maleka, secretary general of Prodwusa.

Many employers are still unaware of their legal obligations—or simply don’t think of themselves as formal employers. This mindset, Maleka argues, is part of the problem.

“These are recognised workers with rights, and employers must understand their obligations—starting with contracts, UIF registration, and more,” she said.

Steps Already Taken: UIF and Compensation Fund

Since 2023, employers of domestic workers have been legally required to comply with the Basic Conditions of Employment Act (BCEA) and the Sectoral Determination for Domestic Workers (SDDW).

This includes registering domestic workers for:

• Unemployment Insurance Fund (UIF)

• Compensation for Occupational Injuries and Diseases Act (COIDA)

In practical terms, it means that anyone earning more than R1,000 a month (which includes nearly all domestic workers) qualifies for UIF. Employers must deduct 1% of the worker’s salary and match it—totalling 2%.

Yet uptake has been painfully low.

A 2024 report by SweepSouth revealed that only 7% of domestic workers on its platform were registered for UIF. Even fewer knew about COIDA—59% had never even heard of it.

Prodwusa’s Pension Proposal: A Voluntary, Employer-Backed Fund

To address the pension gap, Prodwusa is now proposing the creation of a dedicated pension fund for domestic workers.

The plan is being rolled out in two phases:

• Phase 1: Voluntary Pension Fund
  Under Section 4 of the Pension Funds Act, the union is registering a new fund with the Financial Sector Conduct Authority (FSCA). It will start with voluntary contributions from workers and employers in Prodwusa’s existing network.

  “We want something tangible—black and white evidence—to demonstrate how the fund could work,” said Maleka.

• Phase 2: Policy and Legislative Advocacy
  Once the model is operational, the union plans to lobby Parliament and key government departments—including National Treasury—for full-scale support. The ultimate goal is to amend the existing Pension Funds Act or pass new legislation to cover domestic workers nationally.

What the Pension Model Would Look Like

The proposed model would require both employer and worker to contribute 5% of the salary toward the pension fund.

Crucially, it wouldn’t rely solely on government support, but would mirror practices used in the formal employment sector—where retirement contributions are standard.

Maleka confirmed that the idea has already gained traction within parts of government. “Even Treasury and the Department of Labour representatives have expressed willingness to support the initiative. That gives us confidence,” she said.

What’s Next?

Prodwusa is now focused on getting the voluntary fund up and running. It believes a working prototype is key to convincing legislators and winning over hesitant employers.

The union is also launching educational campaigns to raise awareness about workers’ rights—starting with UIF, COIDA, and now, pensions.

The push for domestic worker pensions in South Africa reflects a broader effort to close the gap between recognition and real benefits for one of the country’s most underappreciated workforces.

As the Prodwusa-led pension fund moves into action, it could mark a turning point for hundreds of thousands of workers—and help reshape how South Africa values domestic labour in the years to come.

{Source: BusinessTech}

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com