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COVID-19: The UIF announces important updates to TERS benefit information
- 16 April 2020
- Corporate Tax
- The Tax Faculty
Important:
This article is based on tax law for the tax year ending 28 February 2020.
Many businesses directly or indirectly impacted by the COVID-19 pandemic, have one problem in common: How do we pay our employees during this time? The answer, it seemed, was to make use of the Temporary Employer/Employee Relief Scheme benefit (“TERS”). However, so many uncertainties existed related to the value of such benefit, how such benefit should be claimed, when such benefit will be payable etc. We also experienced the frustration of working with information that is ambiguous with constant updates thereto being released.
A COVID-19 Frequently Asked Questions document has recently been released by the Department: Employment and Labour that answers some questions whilst raising more. This document can be located here:
The following information in this Frequently Asked Questions (FAQ) document should be carefully noted:
- It is explained that the process to claim a TERS benefit involves sending an email to covid19ters@labour.gov.za. Once such email has been sent, an autoreply will be received explaining the process and providing instructions relating to documents that should be completed. The autoreply also includes templates of documents required for submission. It is, however, very interesting that it seems like an online application process has now been launched (which can be accessed at the following address: https://uifecc.labour.gov.za/covid19/). There is still uncertainty at this stage whether the online process replaces the manual proccess and whether re-application is necessary.
- Furthermore, interesting to note is that the FAQ document indicates that an employer must be registered with the UIF to qualify for this benefit and that companies that register with the UIF after 15 March 2020 may not be eligible for this benefit.
- The COVID-19 TERS benefit is only available for 21 days. This will, in all probability, be updated based on the extension of the nationwide lockdown that was announced by Mr Cyril Ramaphosa. The deadline has been explained as follows: “… no applications will be entertained once the lockdown is lifted…”. Information is not available about whether “lockdown” should be interpreted as only the initial lockdown period of 21 days or also includes the extension of the lockdown period of another 14 days.
- Persons exclusively earning commission and freelance workers will not qualify for the TERS benefit as they are not contributors to the UIF. However, employers of domestic workers (who are UIF compliant), will qualify for the benefit.
- The document indicates the turnaround time to process applications as 10 business days after submission of completed documents.
- In terms of the FAQ document, employees could be commanded by their employers to take unpaid leave and that employers would be within their rights to enforce such. Employers must, however, assist their employees to apply for the COVID-19 TERS benefit.
CONCLUSION:
We find ourselves in troubled waters and try to steer our boats in the right direction. Whilst uncertainties still exist, we are slowly but surely finding more clarity about relief measures that the South African Government introduces to limit the impact of the Covid-19 pandemic on the economy, the country, and its citizens. This, too, shall pass and South Africa will prevail.
REFERENCES:
- http://www.labour.gov.za/easy-guide-for-employers-on-covid19
- https://uifecc.labour.gov.za/covid19/
- http://www.labour.gov.za/DocumentCenter/Regulations%20and%20Notices/Regulations/Unemployment%20Insurance%20Fund/Amended%20COVID19%20temporary%20employee%20or%20employer%20schedule%20C19TERS%202020.pdf
Webinar Commentary
Get a full update of the most important tax amendments and proposed changes on the Webinar-On-Demand presented by Prof Jackie Arendse here.