Covid-19 UIF pay: Firms are receiving millions, but some are unsure how much to pay each worker

Business Insider SA
A labour centre in Johannesburg.
  • The UIF has paid out more than R1.6 billion into employers' bank accounts.
  • Companies must now transfer that money to their workers.
  • But most companies did not receive instructions on how much each worker is entitled to – and there is some confusion about how to calculate the individual payouts. 
  • For more stories, go to Business Insider's home page.

The Unemployment Insurance Fund has so far paid out more than R1.6 billion in special coronavirus benefits – known as the Covid-19 Temporary Employee/Employer Relief Scheme (TERS) – to 37,000 companies.

The money is paid, in one lump sum, directly into the companies’ bank accounts, and they have to then pay it to the 600,000 workers who have been put on unpaid leave, laid off temporarily, or who only received part of their salary.

But most companies did not receive any guidance from the UIF about how the money should be split among the employees.

READ | Claiming money from the UIF: Everything you need to know

According to a survey among the 10,000 members of the National Employers Association of South Africa (NEASA), less than one percent received a payment schedule along with the UIF money in their accounts.

This means companies don’t have instructions about what amount each employee should get.

The UIF uses a specific formula and a sliding scale to determine what each recipient is entitled to. In essence, it will be a percentage of an employee’s salary, from 38% (for the highest earners) to 60% (for the lowest earners). The maximum you will get is R6,730 a month (if you earn more than R17,700) – while the minimum amount is R3,500.

The payout period covers five weeks (the lockdown period), not a month, which adds to the complexity of the calculation. There is no official online calculator to determine TERS payouts.

See also: All the financial help available to South Africans during the coronavirus crisis

Some companies are finding that their own calculations do not match with the amounts they received from the UIF, says Jan Truter, director of the labour law advisory platform Labourwise. “They may be left with extra money – and don’t know how to divide it among their employees.”

And if they pay employees the wrong amounts, companies would potentially have to ask for money back, an administrative nightmare.

“My advice would be to wait until there is a clear payment schedule from the UIF before payments are made,” Truter said. Some companies have reported that by Thursday they had access to a “Payment Breakdown Report” that was published online with their accounts.

Spokesperson for the UIF, Lungelo Mkamba, says companies who are uncertain about what they should pay should contact the fund immediately. Companies have to pay out the TERS money to their workers within 48 hours.

(Compiled by Helena Wasserman.)

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