Unemployment Insurance Fund (UIF) is an arrangement between the employer and government, which is designed to grant a short-term relief for employees in the event that they become unemployed or are unable to work for such reasons as maternity, adoption leave, or illness. It also provides relief to the dependants of a deceased contributor.
In South Africa, UIF is governed by the following legislation:
- Unemployment Insurance Act, 2001 (the UI Act)
- Unemployment Insurance Contributions Act, 2002 (the UIC Act)
Due to the COVID-19 pandemic, department of labour’s offices in Johannesburg are closed, but applicants can apply online. The current pandemic crisis has witnessed a number of employees benefiting through UIF.
For employees to benefit through this facility, employers need to apply for the coronavirus benefit in the event that they can’t afford to pay workers. The department of labour can only afford to pay recipients not more R6 730 a month.
The department of labour’s regulations are that anyone who works more than 24 hours a week is entitled to contribute 1% of their income, which would be deducted from their paychecks, and paid over by their employer to the UIF.
Besides the UIF, the South African government unveiled a special new coronavirus benefit, which seeks to benefit workers negatively affected by the COVID-19 crisis.
What you need to know about claiming in time of the coronavirus crisis:
Who can claim from the UIF at this time?
- Anyone who has lost their job can claim an unemployment benefit from the UIF – and if your company reduced your working hours, you can also put in a claim.
- If you have been laid off during this time, or if you have been laid off temporarily.
How does the new coronavirus benefit work?
- A company should apply to the UIF to get money to pay its workers. The business should prove that it suffered a severe knock from the lockdown. If permitted, the UIF will pay out workers for up to three months.
- Unlike normal UIF benefits, which is paid to workers, the money may be distributed first to the company, which will then pay workers.
- And also unlike the normal UIF benefits, you don’t have to have enough “credits” with the fund to claim the money. The normal UIF rule is that that you could get one day’s pay-out for every four days’ work (up to certain maximums). But this falls away for the new coronavirus benefit. All workers at approved companies will get payments.
How much will I get?
UIF will based on the percentage of an employee’s salary, according to a legislated sliding scale from 38% (highest earners) to 60% (lowest earners).
The maximum a worker van get is is R6 730 a month. The sliding scale stops at R17 702: All workers earning more than this will only get the 38% maximum benefit (R6 730). The minimum amount will not be below the minimum wage (around R3 500).
How do I claim UIF?
People can claim for UIF via this link. From the home page, click on the ‘Activate my uFiling account’ button and follow the on-screen instructions. You will receive a case number to track your progress. You can also email Online.BCP@labour.gov.za for guidance.
When will you get the money?
The approved time for UIF payments claims is 15 working days. The timeframe is not yet clear for the new benefits, but many companies have already been paid.