UIF claims options

YOUR BEST OPTION?

21 April 2020

UPDATE:
  • Some of the bigger players are now rolling out very good resources and summaries to help inform business decision making during the COVID-19 lock-down. Please have a look at the Wesgrow website and the DGE Chartered Accountant pdf power point presentation. These are the best resources we could find so far. Our thanks to both organizations for making the information available.
  • Please note that the UIF Covid-TERS applications have now switched to online applications at https://uifecc.labour.gov.za/covid19/ . This promises to speed things up dramatically.
  • We've seen reports that the Covid-TERS payouts are coming through and at some speed. Unfortunately it is not accompanied by a breakdown on how the monies are to be allocated to the different employees. Consider apportioning the pay-outs to the minimum amount of R3,500 per employee adjusted to your claim period (full month or just to 16 April for early submissions) and pay the difference out once the apportionment details are received.
  • If you have claimed up to the 16th of April in your first Covid-TERS application, please add a second claim for the period 17 April to 30 April and adjust the .csv file name accordingly (numbered 2 or 02 at the end of the name).

YOUR BEST OPTION?

PREAMBLE

(7 April 2020)

There is a LOT of uncertainty about the available options for CoVid-19 related UIF  claims - this represents our understanding at this time (please see the disclaimer on our landing page). One size does not fit all, and in our opinion the government legislation and the wording thereof is not consistent with the views expressed by government officials and politicians and the on the ground reality of the Covid-19 impact on businesses. To paraphrase, the intention of the government in terms of Covid-19 salary interventions as expressed in the media is not effectively translated into actionable legislation for anything other than the median CoVid-19 related business impact scenario specific to the declared lock-down period.  You and your business might be fortunate and fall within the ambit of the Covid19-TERS. In our opinion two of the major shortfalls (and there are more) are:

1) Business that suffered Covid-19 related financial distress prior to the Covid-19 lock-down that were unable to pay or fully pay their staff for March 2020, as cash flow dried up. The UIF Covid-19 TERS legislation as it is currently worded only caters for the 27 March to 16 April 2020 period. This would typically apply to restaurants, wedding and other function related venues and support services, as well as the tourism industry and associated services.

2) Many businesses (us included) are on partial lock-down and are therefore not totally closed for business. The UIF Covid-19 TERS legislation does not cater for businesses in this scenario. This would typically include businesses where some personnel are able to work remotely, whilst the office service and maintenance staff are temporarily retrenched. It will also include essential service providers operating on skeleton or reduced staff (out of necessity and on request from government) to minimize potential exposure to the CoVid-19 Corona virus.

AVAILABLE OPTIONS FOR COVID19 UIF CLAIMS

1. Covid-19 TERS/C19 TERS (previously called National disaster Benefit fund).

This is first prize and should be the claims mechanism used for all qualifying businesses. It is effectively a temporary retrenchment for the lock-down period. Application through the fast-tracked C19 TERS process.

2. Unemployment

Permanent retrenchment due to Covid-19. Please consider  using the C19 TERS option in the interim and then reassessing the need for permanent retrenchment after the lock-down is over. Your staff will have access to the C19 TERS benefits now and will then claim through standard UIF procedures should subsequent permanent retrenchment be unavoidable.

3. Reduced Work Time (RWT).

Reduce the total number of work hours or days of some/all employees, due to cash flow constraints. A mechanism used instead of permanent retrenchment and claimed through the standard UIF procedures.

4. Illness

Covid-19 related illness, claimed through Standard UIF procedures.

Temporary employer/employee relief scheme - COVID-TERS

  • Business CLOSED due to the Covid-19.
  • Employees cannot work due toCovid-19.
  • Employees are temporarily retrenched due to Covid-19.
  • Claims under Covid19-TERS can only be made for the lock-down period, not before.
  • Complete the MoA when applying, even if you have less than 10 employees (remove all reference to the bargaining council first. Also do this if you have more than 10 employees and an agreement was not reached via the bargaining council).

(8 April 2020)

SEESA interpretation*

The employer representative organsation SEESA released a guide to their clients with comprehensive analysis of UIF claims (see links and resources page). This analysis contradicts a lot of other professional sources, but seems to hold the most practical approach. We suggest that you study this document to help inform your UIF related claims decisions. Take a good look at the Q&A section.

Important takeaways from the SEESA report:

# Businesses under partial closure due to Covid-19 can still claim under C19-TERS.

# Short-time essential workers (not working the same hours/days as before lock-down due to Covid-19) must claim under the UIF reduced working hours, NOT C19-TERS.

# A certified bank statement is required in the application - please have this certified at your bank.

 

COVID-TERS, if it applies to you, is a good mechanism to claim UIF payments because:

  • It is the department of Labours preferred option (more resources are put into facilitation).
  • It allows bulk claims (One form per company and not one form per employee).
  • It is geared to quick pay-outs (how quick? the talk is of a 10-day turnaround, but no guarantees).
  • Claims are not tied to UIF credits (short term employees will get equal pay to others in the same bracket).

 

Standard UIF claims procedures apply if ...

  • Employees are giving short time, i.e. working less hours per pay period than normal.
  • Employees under forced or voluntary quarantine.
  • Employees contract the Corona virus/Covid-19 disease.

Required documents:

Important links and resources are given in the links and resources library.

Please use these resources to help inform your decisions.