How to claim UIF Compensation during the Coronavirus Crisis

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Vision Consulting has provided the following information regarding Claiming Compensation from the UIF during the #Coronavirus crisis.

The UIF is there to help during times when employees are not able to earn an income. The current coronavirus and Covid19 crisis sweeping the world is one of those times, the UIF has accordingly put steps in place that will compensate affected employees through the “National Disaster Benefit ” Scheme established.

There are different paths that face an employer at this stage, and it all depends on the individual situation that they are in. For example, if the employer is forced to close because of the lockdown, this would be a temporary layoff. If the employer cannot pay their employees for this period, the employer can apply for the National Disaster Benefit from the UIF.

Temporary Layoff/Reduced income – Less than 3 months

One of the main benefits from Government is the Temporary Employee/Employer Relief Scheme (TERS). This is a benefit fund run by the Department of Labour and the benefits are regulated as laid down in this directive. This was issued by the Department on 8th April 2020.

Some of the frequent questions relating to this scheme are listed below;

Who can claim against this scheme?

Any contributor to the UIF can claim against this scheme. This means that an employer or an employee can lodge a claim. The Department advises that the employer rather be the claimant to prevent an influx of claims should each employee try claim. Such an influx will lead to delays in claims processing.

What must the status of the employer be to qualify?

The employer must have either totally closed or partially closed due to the COVID-19 crisis. The total closure must be less than 3 months (see below).

Does it matter how many people are employed by the employer?

The size of the workforce does not affect the claims. There are some clauses that are specific to employers with less than 10 staff.

Does it matter how long a person has been employed?

No, as long as the person was employed by the employer as at the 27th of March 2020, and they are suffering a loss because of the closure, they will be entitled to claim.

Can the funds be used to cover expenditure other than salaries?

No, this scheme is only to be used to assist employers pay salaries of affected staff. If the employer has made payment to the employee, they will be entitled to retain the amount paid from any benefit received, before paying the balance to the employee.

What amount will be claimable?

The claims will be on a sliding scale between 38% and 60% of the salary. However, this is capped at a maximum salary of R17712.00 per month.
The minimum payment amount will R3500.00
The maximum payment amount will be R6730.00 (38% of Threshold – R17712.00)
The employer MAY supplement these benefits, but the employee MUST not receive more than 100% of their total salary.

What is the process to follow?

The employer sends an email to reporting the total or partial closure.
An automated email will be sent to you with the details of what to do next.

Layoff – Longer than 3 months

If an employee is ill, laid off temporarily, or unemployed for longer than three months the normal UIF benefits apply.

Documents required

These are the documents needed to be completed and submitted by the employer and employee to assist the latter affected by COVID 19:

  • UI19 and UI2.7
  • UI2.1( Application form)
  • UI2.8 ( bank form completed by the bank) or confirmed by the employer
  • A letter from the employer confirming business shutdown or employee’s ” temporary lay-off” due to the Coronavirus
  • Copy of the employee’s ID document

Download links;

In closing

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Vision Consulting was established in 2012 and is a Human Resource and Business Advisory practice focusing primarily on assisting employers to improve the performance of their business through their employees. If you have more specific questions or need more information, please get in touch with Kevin Marlow at Vision Consulting via email for assistance.

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This article was updated with new content on 14/04/2020.

There is a follow-up to this article at How to Claim UIF Compensation during the Coronavirus Crisis – Part 2