Some clarity around a couple of issues for employers planning to apply for funding.
The Department of Labour and Employment has put in place a mechanism to relieve companies affected by Covid-19, which will be accessible to all Unemployment Insurance Fund (UIF) contributors. The UIF will assist affected workers through existing benefits including Illness, Reduced Work Time, Unemployment and Temporary Employer/Employee Relief Scheme (TERS) benefits.
“However, a lot of uncertainty still surrounds the application process and the actual benefits payable by the UIF from the TERS-funding,” says the CEO of the National Employer’s Association of South Africa, who has been quite vocal about the
Here are six things that have been clarified by the Department of Employment and Labour, in relation to completion of the TERS application.
1 Lockdown period
For the purpose of the TERS-Funding application, the lockdown period is limited to 27 March 2020 – 16 April 2020. In the event that the lockdown period is extended, the funding application period will most likely be extended as well.
2 Monthly remuneration
Only basic salary should be used in the calculation of monthly salary. Overtime and allowances should be excluded. Monthly salary is calculated by multiplying the weekly salary by 4.333.
3 Leave income
Leave income Is defined as the remuneration the employee will receive for the lockdown period including the value of “paid leave”.
4 Employment end date
This column should remain blank, except if the employee’s service ends during the lockdown period for whatever reason.
5 Use the minimum wage
The minimum wage for the following three sectors should be used for the TERS-funding application:
- Domestic R124.56 per day
- Agricultural R149.44 per day
- EPWP R91.36 per day
For all other sectors, the amount of R166.08 per day should be used regardless of the minimums prescribed by bargaining councils.
6 Which bank account?
The opening of a special bank account for the TERS-funding application is only required for bargaining councils. Employers can use their payroll or business account. Employers should also take note that bank account confirmation is required by employers and should be submitted with their application.