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Claiming from the UIF during and after the lockdown

The government have created lay-off options.

The coronavirus pandemic has closed many businesses and left many in South Africa without an income.

The government have created two temporary lay-off options:

  • UIF Reduced working time option and
  • Covid-19 temporary employer-employee relief scheme (C19 Ters).
  1. UIF ‘Reduced working time’ option:
  2. The “reduced working time” option is for employees who must work a short time. This benefit was introduced in 2018 in the following terms: “A contributor employed in any sector who loses his or her income due to reduced working time, despite being employed is entitled to benefits if the contributor’s total income falls below the benefit level that the contributor would have received if he or she had become wholly unemployed, subject to that contributor having enough credits.”

    What documents do you require when claiming?

    • UI 19 and UI 2.7 (completed by your employer)
    • UI 2.1 (application form)
    • UI 2.8 (bank form must be completed by the bank)
    • A letter from your employer confirming that the temporary layoff is due to the Covid-19 virus and lockdown
    • Copy of identity document.
  3. Covid-19 temporary employer-employee relief scheme (C19 TERS)
  4. This scheme is intended to provide emergency relief to enable employers to pay employees who are temporarily laid off due to the Covid-9 crisis. An employer who is directly impacted by the Covid-19 pandemic and has had to close its operations or a part of the operations for approximately three months shall qualify for the Covid-19 temporary relief benefit.

    In terms of Ters, the salary to be taken into account in calculating the benefit is capped at R17 712 per month per employee, with the employee receiving the benefit in terms of the income replacement rate sliding scale from 38% to 60%.

    If the employee’s income falls below R3 500 the employee will be paid a replacement income equal to that amount. Find the calculation here.

Social grants

As of April 21, President Cyril Ramaphosa has announced an increase in social grants which include a new coronavirus grant. A total of R50 billion of the R500 billion economic and social relief package will be used to fund the Covid-19 crisis.

The new social grants are as follows:

  • Child grant will be increased by R300 in May and thereafter by R500 each month from June to October.
  • All other grant recipients will receive an extra R250 per month for the next six months.
  • A special Covid-19 Social Relief of Distress grant will pay R350 per month for the next six months for individuals who are currently unemployed and do not receive any other form of social grants or UIF payment.

As of May 3, there are 6 783 confirmed cases, 2 549 recovered and 131 deaths.

General UIF claims

Can you claim for UIF after you retired at 65?

Not many people are aware that they could register for the Unemployment Insurance Fund (UIF) benefits if they have retired at 65 from employment and will not be seeking further employment. You cannot claim if you have taken early retirement.

Many people would like to have an option to continue working after they have reached retirement age because they were not able to save sufficiently towards retirement.

Also, did you know that when you retire from your retirement funds and choose to transfer the full capital into a living annuity, you could come across some unforeseen delays which could potentially mean a delay in receiving a retirement income? The good news is that you can claim for UIF for a maximum of 238 days if you are dependent on the income you will receive from your living annuity.

However, for the process to complete it can take some time. You must apply within six months from the date of your retirement provided that you have enough credits in the system. For your claim to be processed efficiently and quickly, it is important to make sure all your employer records are up to date on the company’s system.

The process to claim your UIF benefit would be as follow:

  • Request a UI-19 form from your HR Department.
  • Ensure that your employer filled, signed and stamp the form.
  • Submit the required forms to the Department of Labour.

What documents do you require when claiming?

  • UI 19 (completed by your employer)
  • UI 2.1 (application form)
  • UI 2.8 (bank form must be completed by the bank)
  • A service certificate from the employer
  • Copy of identity document.

The claim pays 38% to 58% of your gross salary capped to R14 872. Once your claim has been approved you will receive a pay-out every 30 to 35 days until your benefits have been fully paid out.

This can be very helpful towards your first year of retirement as we all know it is very difficult to maintain a living after retirement.

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Michael Haldane

Global & Local Investment Advisors

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