UIF subsidy applications open

For employers who have had to send their workers home because of the lockdown.
UIF applications open for businesses affected by Covid-19. Image: Moneyweb

Businesses in need of the Unemployment Insurance Fund (UIF) subsidy as a result of the lockdown, may now apply through the department of labour.

On Friday morning the Minister of Employment and Labour department Thulas Nxesi announced that to mitigate the impact of the 21-day national lockdown on workers, business and the economy, the UIF will be electronically processing applications for the Covid-19 TERS Benefit.

This follows President Cyril Ramaphosa’s announcement on Monday evening, saying the government is also looking at temporarily reducing employer and employee contributions to the UIF.

Due to the lockdown employees may be laid off temporarily and may not be paid. Whilst employers are encouraged to pay employees during this period they are not obliged to do so. In the case where an employer is financially unable to pay its employees,  a special benefit fund called the UIF-TERS has been set up.

This means that a company which has to close its operations for a period of three months or less, due to the COVID-19 pandemic will qualify for TERS benefit, provided that:

  • The company is registered with the UIF;
  • The company must comply with the application procedure for the financial relief scheme; and
  • The company’s closure must be directly linked to the Covid-19 pandemic.

How to apply

Employers are encouraged to apply for the Covid-19 TERS  benefit from the UIF by sending an email to covid19ters@labour.gov.za.

Nxesi said that “During the lockdown period, manual claims will not be accepted to reduce contact between people to curtail the spread of the pandemic,” Nxesi said.

The employer shall be required to submit the following documents:

  • Letter of authority from the company,
  • A signed memorandum of agreement from the employer or Bargaining Council with the UIF.

He said that upon sending the email, applicants will receive an automated reply which outlines all the steps and details, including the requirements to claim benefits.

The department says the Covid-19 TERS Benefit is de-linked from other UIF Benefits and other processes, however, applications are subjected to normal verification and validation processes of the Fund.

The benefit will only be for the cost of salary for employees during the temporary closure, will be capped to a maximum amount of R17 712 per month per employee and an employee will be paid in terms of the income replacement sliding scale (38%-60%) as provided for in the Unemployment Insurance Act.

This is subject to the limitation that at no time will the salary paid fall before the minimum wage provided for in a particular sector.

No chance takers

UIF Commissioner, Teboho Maruping, warned against chance takers.

“I would also like to caution workers and companies that submitting a fraudulent claim is a criminal act that will be prosecuted to the fullest extent of the law”.

The department has also developed a hotline number: 012 337 1997 for Covid–19 TERS Benefit enquiries during the 21-day lockdown period.

Workers and companies are urged to follow @DeptofLabour and @UIFbenefits on Twitter and visit www.labour.gov.za for regular updates.

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Excellent. Cash flow at the end of April is vital to avoid civil unrest in my view!

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