WHAT IS THE TERS SCHEME UNDER THE UIF AND HOW DO I APPLY FOR IT?

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Published: April 17, 2020

Institution:  Department of Labour and Employment, and Unemployment Insurance Fund (UIF)

 

 

UPDATE ON WHO MAY APPLY:

On 15 May 2020, the Minister of Employment of Labour amended the rules related to TERS in order to allow for circumstances where an employee will be able to apply directly to the fund. To access this new directive, please click here.

According to the new directive, an employee may individually apply for COVID-19 benefits if:

  1. The employee is a UIF contributor who has lost income due to the COVID-19 pandemic;
  2. The employee’s employer has failed or refused to apply for COVID-19 benefits; and
  3. No bargaining council or entity has concluded a memoranda of agreement (MOA) with the UIF.

This will apply retrospectively, from 27 March 2020.

 

UPDATE ON PAYMENTS:

According to the Minister, the UIF has started paying workers directly to their bank accounts and not through employers only. What this means is that workers do not have to wait until employers transfer their benefits to their accounts. While the claim is submitted by the employer who would have all the information that is pertinent to make the payments, the actual payment goes straight to the account of the worker thus eliminating further waiting period. To access this specific notification, please click here.

To access the Department of Labour’s Frequently Asked Questions (FAQ) document relating to the COVID-19 TERS benefit please click here.

 

UIF – TEMPORARY EMPLOYEE RELIEF SCHEME (TERS)

The TERS scheme applies to employers and employees who are facing distress, on lockdown and unable to pay salaries due to the lockdown. It is one of the key ways that the government is helping distressed workers during the coronavirus pandemic.

 

In terms of eligibility, any UIF contributing business, facing distress and unable to pay salaries as a result of the COVID-19 pandemic for the period of the National Disaster; and any employee who is a contributor (works more than 24 hours a month) and there is an employer and employee relationship can apply for the COVID-19 TERS Relief Benefit. Said differently, the Scheme makes provision for payment of benefits to UIF contributors who have lost income due to the COVID-19 pandemic, with the objective being to minimise the economic impact of loss of employment because of COVID-19.

 

TERS is available to UIF contributors (both employers and employees) with the Department of Labour noting that all businesses with employees, from spaza shops to hair salons to domestic workers who are registered with UIF can apply for this relief. The proviso here is that the company was a contributor to UIF before 15 March 2020. Importantly, the benefit shall be de-linked from the UIF’s normal benefits; the COVID-19 TERS benefit will not affect any credits because it is a special benefit.

 

Since 27 March, the UIF has been processing COVID-19-TERS applications electronically. Please click on the following link to access the online application form. Please see the following link to the Government Gazette outlining this directive.

 

To access the Department of Labour’s Easy Guide for Employers on COVID-19 (COVID-19 TERS Solution Guide), please click here.

 

Importantly, there are parameters and conditions to this facility in order to be eligible for the said benefit, including that if the employer as a direct result of COVID-19 pandemic closes its operations for a 3 (three) months or lesser period and suffer financial distress, the company shall qualify for a Covid19 Temporary Relief Benefit.

 

In terms of payment of the money, payment will be made to:

 

  1. Employers
  2. Bargaining Councils /Employer Associations
  3. Employees

 

Either, the employer concludes a Memorandum of Agreement (MOA) with the UIF or accepts the UIF’s standard terms and conditions, or the employer is a member of a bargaining council that has concluded an MOA with the UIF.

 

Funds will be paid to the employer or the bargaining council who will disperse the funds to employees, or to the employee directly. The only other exception is where an employer has fewer than 10 employees.

Special provisions of the MOA apply to employers with fewer than 10 employees.

 

The value of the benefit is determined according to a sliding scale.

 

Employees will receive a percentage of their salary, in terms of the income replacement rate sliding scale (between 38 and 60%).

 

The salary to be taken into account in calculating the benefits will be capped at a maximum amount of R17,712.00 per month, per employee.

The minimum amount to be paid by UIF to clients under the scheme is R3,500.00. The maximum amount to be paid by UIF to clients under this scheme is R6,638.40.

For further information regarding the COVID-19 TERS formula, please click here.

Employers can supplement the UIF TERS benefits, but employees may not get their full salary PLUS the benefit. The maximum that an employee may accordingly receive (from the UIF and their employer) is 100% of their salary.

 

QUALIFYING CRITERIA

For the company to qualify for the temporary financial relief scheme, it must satisfy the following requirements:

  1. The company must be registered with the UIF before 15 March 2020;
  2. The company must comply with the application procedure for the financial relief scheme; and
  3. The company’s closure must be directly linked to the COVID-19 pandemic.
  4. For further information regarding qualifying criteria and other related COVID-19 TERS information, please click here.

 

Further, as noted above the company must have closed its operations, or part of its operations, as a direct result of the COVID-19 pandemic, for a period of 3 months or less.

The employee must have been in the employer’s employ on 27 March 2020 and must have suffered or will suffer, a loss of income as a result of the closure.

The benefit may not be used for purposes other than covering the cost of salaries during the closure.

 

 One of the most notable amendments in the Government Gazette published on 04 May relates to annual leave and how it impacts TERS claims.

The Directive states that an employer, who has required an employee to take annual leave during the period of lockdown in terms of the Basic Conditions of Employment Act, 1997, may set off any amount received from the UIF in respect of that employee’s COVID-19 benefit against the amount paid to the employee in respect of annual leave provided that the employee is credited with the proportionate entitlement to paid annual leave in the future.

Further, in view of social distancing an in order to avoid individual applications, the Directive states that should an employer as a result of the COVID-19 pandemic close its operations, or part of its operations, for a 3 (three) months or lesser period the employer must apply for COVID-19 benefits for and behalf of its affected employees.

The Directive also notes that in order to speed payment of COVID-19 benefits to employees, employers are urged to pay employees first before claiming reimbursement or setting-off the claim through the UIF.

To read the full Gazette, please click here.

 

APPLICATION PROCESS

As noted above, Minister Nxesi announced on 15 May 2020 that employees will in certain circumstances, now be able to apply directly for financial assistance from the UIF. While the directive gave no additional information as to the application process for employees to directly apply for the said benefits, the process is likely to be the same as it is for employers.

To access this new directive, please click here.

 

The employer needs to apply by reporting their closure to Covid19ters@LABOUR.gov.za. The employer will receive an automatic response outlining the application process.

The following documents will be required:

  1. Letter of authority from the company;
  2. Signed Memorandum of Agreement (MOA) or electronic acceptance of the standard terms
  3. The UIF’s template which includes details of the employer, the period of closure, the list of employees and their dates of employment and ID numbers, the remuneration received by the employees;
  4. Proof of remuneration to employees for the previous 3 months
  5. Confirmation of employer bank account

 

Submit/transmit all documents as required to UIF via dedicated mailbox Covid19UIFclaims@labour.gov.za

 

For more information please click here  or contact the UIF COVID–19 Call Centre on 012 337 1997, Monday to Friday from 08h00 – 20h00.

 

Please click on the following link to access the online application form.

 

Alternatively, the employer needs to apply by reporting their closure to Covid19ters@LABOUR.gov.za. The employer will receive an automatic response outlining the application process.

 

 

 

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