Audit & Accounting » Struggling with TERS and UIF applications? Your Questions Answered

Struggling with TERS and UIF applications? Your Questions Answered

Many employers throughout South Africa are still grappling with the ins and outs of the Temporary Employer/Employee Relief Scheme (TERS). In this post, we answer your most frequently asked questions.

 

What is TERS?

TERS—the COVID-19 Temporary Employer/Employee Relief Scheme—is a unique benefit set up by The Department of Employment and Labour during the National State of Disaster. It provides funds from the Unemployment Insurance Fund (UIF) to employers to pay employees under certain conditions.

It is also, sometimes, referred to as C-19 TERS, the C-19 TERS benefit or the COVID-19 relief benefit.

 

Who Can Apply for the Relief Benefit?

  • Employers and employees who contribute to the UIF whose income has been directly affected as a result of the National COVID-19 Lockdown.
  • The employer must have closed its operations, or part of its operations, as a direct result of the COVID-19 pandemic, for a period of three (3) months or less.
  • The size of the employer’s workforce does not matter. Special provisions of the Memorandum of Agreement apply to employers with fewer than ten employees.
  • 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 only cover the cost of salaries during the closure – it may not be used for other purposes.

 

For How Long Will the Benefit Be Available?

According to the Department of Employment and Labour’s FAQ’s published on 15 April 2020, the COVID-19 TERS benefit is applicable for the lockdown period, (and that) no applications will be entertained once the lockdown is lifted.

Fund benefits under the COVID-19 TERS benefit are paid in relation to three separate periods:

  1. The period of temporary closure for 30 days from the date of lockdown;
  2. Any period of temporary closure during the following 30 days; and
  3. For any period of temporary closure during the balance of the Memorandum of Agreement. The Agreement is in force for three months from the date of confirmation by the UIF that it accepts the employer’s COVID-19 TERS application.

 

Are Employers or Employees Responsible for UIF COVID-19 Claims?

Employers/Companies are encouraged to apply on behalf of their employees, unlike “normal” UIF benefits. The company is required to prove loss of income due to the COVID-19 pandemic.

If approved, the benefit will be paid to the employer, who will then pay the employees. However, only if the employer has concluded a Memorandum of Agreement with the UIF or accepted the UIF’s standard terms and conditions. We recommend that employers accurately reflect UIF TERS benefits on employees’ payslips.

Where an employer is a member of a bargaining council (that has concluded a MOA with the UIF), the amount will be paid to the bargaining council to administer the funds.

 

How Do I Apply for the COVID-19 TERS on behalf of my Employees?

Employers can visit https://uifecc.labour.gov.za/covid19, register and follow the application process. Alternatively, an employer can send an email reporting the total or partial closure to covid19ters@labour.gov.za following which they will receive an automated reply that outlines the process.

Documents and information required for a successful application include the following:

  • A letter of authority from the employer;
  • The signed Memorandum of Agreement, or electronic acceptance of the standard terms;
  • 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;
  • Proof of remuneration to employees for the previous three months; and
  • Confirmation of the employer’s bank account.

 

How Are the COVID-19 TERS Payments Calculated?

As per Government Gazette 43216 of 8 April, 2020: “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 and an employee will be paid in terms of the income replacement rate sliding scale (38%–60%) as provided in the UI Act.”

The maximum amount a recipient will receive is R6 730 a month. The minimum amount of the benefit is R3,500 regardless of the minimum wage as prescribed by the applicable sectoral determination/collective agreement.

 

Can You Help Me with My Company’s UIF TERS Application and Claims?

Yes! Our team is fully equipped to assist you remotely. Let us take the administrative burden off your shoulders, www.exceed.co.za.

 

How can I get more information on COVID-19 and applicable relief measures?

If you wish to know more about COVID-19 and the applicable tax, financial and other important relief measures, see our recent article https://www.exceed.co.za/covid-19-and-applicable-relief/ herein.

 

*DISCLAIMER: Exceed takes no responsibility for the accuracy and/or correctness of the information provided above, and should you wish to enquire about the above, please get into contact with us for purposes of us providing you with bespoke advice in accordance with your particular business needs and/or requirements.