Submitted correctly, UIF is paid out in 24 hours – fund commissioner

How to calculate the UIF-Ters for employees.
Image: Shutterstock

The government-initiated Temporary Employer-Employee Relief Scheme (Ters) is now paying out a day or two later after a successful claim.

Ters provides emergency relief for employers to claim benefits on behalf of their employees during the Covid-19 lockdown. This is to avoid employees losing income or being placed on annual leave as a result of the temporary closure of their employer’s operations.

The rules of the scheme stipulate:

  • Rule 1: The benefit will be de-linked from the UIF’s normal benefits and therefore the normal rule that for every 4 days worked, the employee accumulates a 1 day credit will not apply. The benefit will only pay for the cost of salaries of the employees for the duration of the temporary closure.
  • Rule 2: The maximum salary benefit to be taken into account in calculating the benefits will be capped at a maximum amount of R17 712 per month per employee and the benefit payable to an employee will be calculated using the income replacement sliding scale (38%-60%) under the UIF. In other words the maximum salary benefit is R6 638.40 per month per employee.
  • Rule 3: If an employee’s income is determined by using the scale falls below R3 500, the employee will be entitled to a benefit amounting to R3 500. In other words, the minimum salary benefit will be R3 500 per month per employee.
  • Rule 4: If the employee is being paid in full by the employer during the period of closure, the employee is not entitled to benefit under TERS. However, the employer is permitted to pay TERS benefits to employees in advance and then retain those amounts once the UIF makes payment of the TERS benefits to the employer.
  • Rule 5: An employee may only receive TERS benefits on condition that the total benefit together with any additional payment (ie top up) by the employer is not more than the normal remuneration that the employee would have received for working during that period.

However, the main frustration for employers claiming benefits under the scheme relates to the constant changes to the system, system errors and only some employees getting paid despite their companies having gone through the same application process and submitted the same documents for their employees.

Unemployment Insurance Fund (UIF) Commissioner Teboho Maruping says although several issues with the application and processing of Ters have been resolved, many challenges remain.

“Our commitment is to improve all the time and to pay back the trust that has been placed in us as a public insurance fund,” Maruping says.

He says so far, the Department of Employment and Labour has paid 2 551 236 workers, bringing the total value disbursed since April 16 to over R14 billion.

“We are now more confident in saying that we are on track to achieve our vision of a caring, accessible and customer-centric UIF that contributes towards poverty alleviation,” Maruping says.

Challenges

Shane Johnson, a professional support lawyer at Webber Wentzel, says that it has found that there is an administrative challenge for many of the foreign nationals working in restaurants.

“What we have picked up is that Zimbabwean-born employees who have applied for the UIF-Ters benefit seem to get rejected. There seems to a system error,” Johnson says.

He says that should an employer be unsuccessful in its Ters application, [due to a system error ] individual employees may apply for the reduced work time benefit under the UIF.

The UIF has also made a special illness benefit available to employees who are quarantined due to Covid-19.

“Ters benefit can assist an employer for a maximum period of three months,” Johnson says.

Treatment of Ters benefit payments

When considering the tax treatment of Ters benefit payments, it’s important to note that it’s the employee who is entitled to the Ters benefits and not the employer, Johnson says.

“Although the employer receives the payment of Ters benefits from the UIF, the employer is merely responsible for processing the payment on behalf of the UIF.”

The payment of Ters benefits should ideally be communicated separately to employees and not included in payslips.

He adds that Ters benefits do not constitute remuneration paid by the employer.

“Employers should not reflect Ters payments as remuneration on employees’ payslips and it should also not be included in their PAYE reporting to Sars.”

This is because the Ters benefit paid in advance is technically exempt from normal tax.

“This means no PAYE should be withheld from the Ters benefit advance in the payroll,” Johnson says. The payment of Ters benefits should be communicated separately to employees and not included in payslips.

However, for employers who pay Ters benefits in advance, it is probably best for employers to process PAYE in the normal course and then to make adjustments at a later stage after receiving the Ters benefits from the UIF. This is a recommended approach given that there is no guarantee that the employer will receive the Ters benefits from the UIF.

Employees who are exclusively commission-based earners are generally not registered with the UIF, therefore they will not be entitled to benefit from Ters.

“However, there are employers who pay a basic salary to commission-based earners. In this instance, the employer’s application for relief from Ters should be linked to basic salaries,” Johnson says.

How to calculate the UIF-Ters for employees

Johnson cites the following example:

If an employee earns R20 000 per month normally, but for the lockdown period the employer implements reduced remuneration and they then earn R15 000 per month, they can use the following formula to calculate how much they can expect to receive from the benefit:

Step 1

Calculate daily income for the employee:

R17 712 x 12 ÷ 365 = R582.31

Step 2

Calculate  Income Replacement Rate (IRR) using UIF formula:

The TERS benefit per employee will be calculated by the UIF in accordance with the rules of the scheme and by the UIF applying IRR to the employee’s daily income. The maximum IRR is fixed at 60% and the minimum IRR is fixed at 38%. 

IRR = 29.2 + 8.80 = 38%

Step 3

Calculate the daily Ters benefit amount:

Daily income x IRR = Daily Ters benefit amount

Step 4

Calculate the total Ters benefit amount:

Daily Ters benefit amount x number of lockdown days = Total Ters benefit amount

R221.28 x 30 days = R6 638.40

R582.31 x 38% = R221.28 (Daily Ters benefit amount)

 

“The total Ters benefit (R6 638.40) added to the amount paid by the employer during the lockdown period (R15 000) should not be more than that the employee would have received for working during that period (R20 000),”

If the employee receives the R6 638.40, this will contravene rule 5 of the UIF-Ters benefit as shown in the table above.

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COMMENTS   33

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CHALLENGES : DEPARTMENT OF LABOUR apparently has NO TECHNICIANS to sort out UFILING errors. That is what I have been told NUMEROUS times by their callcentre.

It is NOT acceptable for a government department NOT to assist the employers with ERRORS ON THEIR SYSTEM !

Almost TWO MONTHS of CONSTANT phone calls and emails to every single email ending with @labour.gov.za (this includes ALL MANAGERS, HEAD OF DEPARTMENT, ETC) and STILL NO RESOLUTION.

NUMEROUS employers are not able to either access their UFILING profiles or upload the UI19 declarations due to ERRORS on THEIR SYSTEM !!!

This means a GREAT NUMBER of employees WHO ARE INDEED ENTITLED to the TERS compensation will not get it. Because of the DEPARTMENT OF LABOUR’s REFUSAL or INCOMPETENCE to FIX THEIR SYSTEM.

NOT ACCEPTABLE !!!

If you kept Ufiling up to date when they launched new ufiling you wont experience any problems now

I remember Minister saying foreign nationals who are legal will receive their UIF funds 3 weeks ago but upto today noone received he said Sars gave them idea how to load foreigners. People are suffering why companies deduct Uif and paye if they can not benefit in disaster like this.

What happens if an employer is deducting from the UIF funds.
There is a webpage to verify how much uif has paid to employees. Yet some are receiving less than half of what was paid?

Hi Donnie

Were they paid for the month of April only or both with May?

I have the same issue, was paid R2000 less. Is this allowed?

I submitted (correctly) on 14 April… My staff were paid last Friday following countless calls. Emails and WhatsApp messages to the individual listed on government’s uif website remain unread after 4 weeks. But thankfully, they have been paid.

Hi
IRR = 29.2 + 8.80 = 38%
Where are these two value coming from or how did you get them?

Thank you

Hi Kiepie

Were they paid for the month of April only or both with May?

I’m still not paid…

I have a ‘subittrd’ correctly file note but no payment.

After four weeks of calling it is impossible to get through.

Most people i know have submitted correctly and it was a constant battle to get their money.

I do not think the department of labour understands or feel our frustration. My company told me on the 5th of May and told me that I was layedoff with immediate effect. I then asked our HR if I can apply for TERS and she said no the company is to apply on our behalf. A week and few days later I was told to apply for ourselves which I went to the system only to be locked out the system. It is two weeks now since I sent the emails, call the call center every day to find a team just to answer me that they will escalated my matter they are just a call center. No one has responded. I don’t think this people understand that we need to claim after all being laid off we are not even getting a salary from our employer this means that our food will only come from them

Your employer must apply.

You can see evidence of the legal marijuana.

It’s been weeks now since it was said employees can register themselves yet that option doesn’t exist. Yesterday our employer said we won’t be paid for May because the UIF system is closed for now yet other(companies) are paid, this whole process is complicated and companies at taking from the poor employees are not receiving the money and in other cases employees get 50%

It’s closed for sure I saw it

The heads of the UIF should be fired with immediate effect. Their U-filing offering is a joke of note and should never have been allowed to go live.

I have e-mail confirmation that declaration files were received in order (sent directly from my payroll software), yet their U-filing system shows not received. I have mail correspondence from the UIF acknowledging new employees and employees that have left, but most of my employees were missing on U-filing and had to be added manually.

The website is more unavailable than available and times out after 5 minutes of trying to retrieve information with a message of ” due to inactivity of the user”.

These clowns at the UIF or Department of Labour are living in Lalaland if they think their systems work anywhere close to an acceptable level for users, yet they keep spewing their garbage that the employer is to blame, damaging years of goodwill nurtured between employer and employee.

Does anyone know if UIF-TERS requires an application EVERY month or if it is automatic once you are registered? May is still not open

For TERS, it will require re-application. Automatic payout won’t make sense, as one of the fundamental principles is partial or full suspension of business operations. This differs from business to business, partly due to the different Levels. And yes, I agree, May applications aren’t yet open – I believe they’re working day and night to try and wrap-up on April first.

Its every month and for now its closed, I don’t understand how our leaders operate it’s near month end now

So here’s my situation.

I submitted my claim and received and sms saying it was approved via sms and that I should go to my nearest labour office after 15 days.
Problem is, all the offices are closed.
So what now?

And just to piggyback on the back of some the other commenters, phoning the UIF is useless, same with mailing them as no one answers the phone or replies to emails.
I just want to know why my employment history is suddenly missing and what to do next.

Can’t say this is a fun process.

“…24 hours…” from which year?

This is really traumatizing,we have been told that they are working on the system for all foreigners who have been contributing uif but until today we have not yet received anything. They are still fixing their system,some people are starving and dying of hunger yet others have been paid while others not because of the system. How long must we wait for the system to be resolved??

Teboho Maruping I would do anything to see a claim correctly submitted, paid out by the UIF within 24 hrs. I think you are living in an alternate reality! Name just one such case PLS…. and not your family, friends or cohorts…. just a regular Joe who had the delightful experience of being of submitting a claim and it being finalised within 24 hrs. C’mon… I challenge you…. show me just one… an honest one…. not something fabricated. Let’s see….

I submitted my employees claims for April 2020 and indeed it was paid within 24 hours. Unfortunately when I wanted to get the breakdown to make sure the money is correctly distributed I just could not login, it kept on saying, “wrong” password. After about 20 e-mails to various UIF sites and even a call to the call centre, still no answer on how to get a password reset. I does show you “password reset”, send to e-mail, but nothing comes through. So does this mean my employees will have to apply for their own relief for May, I cannot help them

I’m not sure why the comment does not seem to be showing.
A question I have is, what do you do if employers are deducting from the UIF?
Are they allowed to?
There is a uif webpage which gives an employee an idea of how much they should receive yet some people have received less than half of this.
A case specifically is a known restaurant at the waterfront.

The headline quote on this article is a blatant lie!!

Still battling, since the start. !@#$%^&

Checked on the website and got confirmation my employer was paid on 01.05.20 also checked my payment was also processed.
However it’s been a nightmare as I have not received nothing but excuses from my employer as to why I have not received MY money yet, from been told they have not been paid to been told they have not received a breakdown as to how much I should be paid, when I enquire I get told i am trying to do her job and harassing Her, few of my colleagues have been paid and about 5 of us not paid.
I am in contact with useless inspectors who can not even assist…. it’s already 19 days later and I have not received a cent… how does one survive or support a family!!

Company has applied the 26th March received no payment and no feedback from TERS. They then change the system company applied again and again no feedback. You call and get call centre, you lodge a complaint and dont even get feedback regarding that either. It’s been almost 2months no payment and no feedback from them at all. When checking website if the company’s name appears on the paid list, the list that is uploaded has problems if going to page 5 onwards comapny names remain the same that is only if you can open the webpage as it’s always down. Regarding Ufiling webpage if and when it works. When checking uif declarations all of a sudden there are no declarations showing but working for a company almost 7years. Is there anything that can be done right?

Very difficult to get any communication from Ters if there are any payment issues. For example one employee is confirmed as paid on the portal, yet never received the funds. Ters don’t answer emails so no way of getting it sorted.

End of comments.

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