Gems also said without the increases, it cannot fulfil its promise to members to maintain a comprehensive basket of benefits, meet its obligation to pay claims and remain market-competitive and financially sustainable.
The union federations said they entered the meeting expecting Gems to table a serious solution. “That expectation was not met. Instead, Gems leaned on actuarial modelling, reserve requirements, claims pressure and industry comparisons to justify an increase that workers cannot afford.”
Labour rejected this defence. “An actuarial report may explain how Gems priced the crisis, but it does not absolve the board and executive management from responsibility for how the scheme got here,” they said.
Fedusa, which is complaining about medical aid contribution increases, says the Government Employees Medical Scheme (Gems) has asked for more time to respond to a memorandum submitted by thousands of public servants after a February 21 protest.
Gems was required to provide a written response by Tuesday.
“Instead, on the last working day before the deadline, the scheme wrote to Fedusa requesting that the response date be extended to 13 March 2026, citing the ‘complexity and breadth’ of the issues raised and the need to conclude internal processes,” Fedusa said.
The unions’ federation said the concerns raised in its memorandum were neither new nor unexpected.
“They arise directly from contribution increases first implemented in January and adjusted on 1 February 2026, as well as from long-standing concerns around governance, affordability and the funding model of the scheme.”
Fedusa said it was concerning that the request for additional time came only at the eleventh hour.
“Fedusa has nonetheless acted responsibly and in good faith by granting a limited and final extension until Friday. This revised deadline is final.”
It said public servants cannot be subjected to indefinite delays while contribution increases remain in place and household budgets continue to suffer.
In January 2026, Gems announced a 9.8% increase, which was subsequently adjusted to 9.5% and implemented on 1 February 2026. This follows a 13.4% increase in 2025.
“In just two years, contributions have escalated by more than 23%. These increases have come at a time when wage growth remains modest, and the broader cost of living crisis continues to erode take-home pay.”
Fedusa said its members were feeling the impact every month.
“Teachers, nurses, police officers and administrative staff are making difficult financial choices. Some are downgrading benefits. Others are questioning whether they can continue to afford meaningful cover.”
Fedusa said its demands remained unchanged.
“We are demanding the withdrawal of the 9.5% increase and the development of an affordable contribution structure in consultation with organised labour.
“We are demanding full financial transparency, including administrative expenditure, outsourcing contracts, procurement arrangements and executive remuneration.”
Fedusa was also demanding an independent forensic audit into governance and expenditure.
“We are demanding a review of the funding and reserve model, including the 25 percent reserve requirement, and we are insisting that Gems return to its founding purpose as a social solidarity scheme for public servants.”
Fedusa said several processes were unfolding in parallel while it awaited Gems’ feedback to its demands.
It said the review of the Public Service Co-ordinating Bargaining Council (PSCBC) Resolution 1 of 2006, which established Gems, has been formally tabled at the PSCBC and engagements would commence this month.
“The minister of public service and administration has undertaken to engage organised labour following his meeting with the Gems board.”
It said a section 77 application had been submitted at Nedlac in preparation for potential mass protest action should meaningful progress not be achieved. The section allows a union to notify Nedlac of a proposed protest action or strike over socio-economic issues.
Fedusa also said legal opinion was being sought on whether the recent increases could be challenged through the courts.
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Gems was not established as a commercial medical scheme, they said. “It was built as a social solidarity scheme for public servants. It cannot now behave like a private scheme by shifting institutional failure onto members while asking workers to accept reduced benefits, higher contributions and weaker protection.”
The federations said labour has made it clear that the 9.5% increase must be substantively reviewed.
Cosatu and Fedusa have given Gems until May 6 to return with a substantive response. “That response must deal directly with the review of the 9.5% increase.”
Trade unions in the Public Service Co-ordinating Bargaining Council (PSCBC) have rejected the decision by the Government Employees Medical Scheme (Gems) to implement a 9.8% membership contribution increase from January, followed by a revised 9.5% increase from April 1.
They said these contribution increases were economically unjustifiable, socially regressive and inconsistent with the founding mandate of Gems.
The unions include the Public Servants Association, the Health and Other Service Personnel Trade Union of South Africa and the South African Policing Union.
“This decision comes at a time when public servants continue to face sustained financial pressure due to rising living costs, increased household debt and stagnant real wage growth.”
The unions said the cumulative effect threatened access to affordable health care and had direct implications for worker wellbeing and the sustainability of public service delivery.
Gems was established through PSCBC Resolution 1 of 2006 as a social solidarity medical scheme and was never intended to operate as a commercial enterprise, they said.
Gems’ mandate was to expand access to health care, particularly for lower- and middle-income public servants, to provide affordable, sustainable and cost-effective medical cover and to promote equity, risk pooling and social solidarity within the public service.
“The repeated imposition of above-inflation contribution increases reflects a sustained departure from this mandate.”
They said instead of strengthening affordability and solidarity, the scheme has shifted financial pressures onto members.
The unions said Gems implemented a 13.4% contribution increase in 2025.
“The 9.8% increase from January 2026, followed by the 9.5% adjustment effective April 1 results in a cumulative increase of 23.2% over two years.
The unions said public servants received a 5.5% salary increase for 2025/26 and would receive a 4% salary increase for 2026/2027, effective April 2026. Inflation remained at about 3.5% in late 2025.
“The mismatch between wage adjustments and medical aid contribution increases is clear. Real income is being eroded. Workers are being forced to choose between health care and other basic necessities.”
According to the unions, the Council for Medical Schemes proposed an average membership contribution increase of 3.3% for 2026 was reasonable. The membership increases by Gems “significantly exceeds the regulator’s benchmark”, they said.
The unions remained deeply concerned about governance and operational deficiencies at Gems, including: weak accountability and insufficient consequence management, continued outsourcing of administrative functions nearly two decades after the establishment of the scheme, and high administrative costs reflected in annual reporting.
They said they were also concerned about executive and board remuneration practices misaligned with public service norms and limited transparency regarding operational budgets and line items.
“Instead of addressing these structural cost drivers, members are being required to absorb escalating increases.”
They also said there had been no meaningful restructuring of benefit options to strengthen affordability for lower-income public servants.
“Risk pooling and cross-subsidisation mechanisms have not been sufficiently enhanced. The consequence is that some members downgrade benefits or exit the scheme entirely.”
The unions demanded the immediate withdrawal of the 9.8% increase from January and the 9.5% adjustment from April 1.
They also demanded a forensic audit into governance, finances, procurement practices and administrative expenditure.
“Organised labour in the PSCBC will embark on a co-ordinated programme of action, including a march and demonstration to the Gems head office on February 21 and engagements with the ministers responsible for public service and administration, health and finance.”
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The federations also demanded a memorandum of understanding that provided for leadership level engagements at least twice a year, supported by a working committee through the Public Service Co-ordinating Bargaining Council.
“If Gems returns with another technical defence instead of a real review, Cosatu and Fedusa will escalate the campaign.”
They said all options were on the table, including intensified workplace mobilisation, mass demonstrations including the withdrawal of labour, regulatory interventions and legal challenges.
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