#5 – COVID 19 – Existing UIF benefits for contributing employers and employees
The Unemployment Insurance Fund (UIF) has always provided for a level of protection to employees and the unemployed. Aside from the new COVID TERS benefit through UIF covered in our previous newsletter, there are a number of existing UIF benefits that are relevant in this time of crisis, and these have been highlighted in various media statements.
This is a quick and basic summary of relevant existing UIF benefits:
Termination benefits can be claimed by the employee on involuntary termination of employment such as end of contract, retrenchment, and closure of business, bankruptcy, negotiated settlement, or reasons, other than voluntary resignation. In this case, the employee whose employment has been terminated applies for the benefits. Employers are urged to assist employees with this as employees are unable to visit the Department of Labour during lockdown, as well as to ease the burden of multiple individual applications.
Reduced work time benefit in terms of UI Act S12(1B) can be claimed by the employer on behalf of the employee, where the reduced work time pay falls below the minimum UIF benefit that could be claimed if the employee became unemployed. Where, for example, an organisation shuts down for a certain period or implements reduced hours, the employee can apply for benefits with the assistance of the employer.
Illness benefit in terms of UI Act S20 is also claimable by the employee where the employee is unable to work and is either not paid or paid below the minimum UIF benefit level by the employer due to illness. This benefit also covers a period of self- isolation or quarantine for 14 days with or without symptoms due to COVID 19 virus. Should an employee be quarantined for more than 14 days, a medical certificate must be submitted with a continuation form for the payment of benefits.
Death benefit in terms of UI Act S30 can be claimed by the spouse or children of the deceased employee. In the event that UIF contributor passes away as a result of COVID-19 contracted in the workplace, death benefits are payable to the deceased beneficiaries.
In all these cases, the amount of the benefit and the duration of the payment of such benefits, is determined based on a sliding scale based on the monthly pay at the time of termination and period of time that contributions have been made to the UIF fund. Benefits accrue on the basis of one day for every 4 days worked accrued up to a maximum of 365 days.
In each case, unlike the new TERS benefit, the benefits are paid directly into the employee’s or their beneficiaries’ (in the case of death) bank account. For forms and details of the documents required to claim go to www.ufiling.co.za to register.
In order to be able to claim any of the above UIF benefits the employer and employee must be or have been registered with UIF and made regular contributions to the fund. For more information about UIF go to https://www.sars.gov.za/TaxTypes/UIF/Pages/default.aspx
In closing; we advise employers to first apply for the TERS benefit (as described in CMDS #4 COVID newsletter) for the period of closure or part closure for up to a maximum of 3 months, and thereafter, if there is still no prospect of realistic recovery, to then consider the options of reduced work time and termination and then to assist employees to apply for benefits accordingly.
There may be readers that are not registered with UIF, either as an employer or an employee. This means that there is no UIF benefit available and employees are left vulnerable as a result. REMEMBER, if your organisation is paying people for work on a regular basis, where they are working more than 24 hours per month for the organisation, it is the organisation’s obligation to register as an employer and the employees to be registered with the Department of Labour and to make the contributions.
CMDS can assist you with meeting your obligations as an employer. We offer a comprehensive outsourced payroll service. Contact us for more information.