If you’re a business owner you’re no doubt feeling overwhelmed by the economic nightmare that’s unfolding, but what may finally send you over the edge are FORMS. Where do you submit them, and what should your business even submit for? To give you some clarity (and restore some sanity) we’re focusing on the difference between two sets of forms you may need to submit on behalf of your employees: UIF and TERS.
Strap in. It’s going to be a pot-hole filled ride (at 70% capacity).
UIF (Unemployment Insurance Fund) relief
You’re probably familiar with this one, but there’s a plot twist. Every company has to pay UIF at the same time as PAYE and SDL. If you are PAYE compliant, then you’re also up to date with your UIF payments. HOWEVER, this doesn’t mean that your business is registered with the Unemployment Insurance Fund itself.
To check if you’re registered please contact us and we’ll assist you.
Now, you can only apply for employee UIF relief due to reduced hours or employee illness (this includes if an employee has self-quarantined for 14 days due to COVID-19 infection and if they’re quarantined for more than 14 days, but that requires a bunch of other forms).
Benefits payable is the difference between what you, the employer pays and normal UIF benefits payable should an employee lose their job.
TERS (Temporary Employee/Employer Relief Scheme) relief
TERS has been the set up under the UIF as a COVID-19 economic relief measure. If companies are forced to completely shut down due to COVID-19, TERS is a special benefit that makes sure employees are still paid.
But, it only applies to the following:
- Businesses that have closed for three months or less and can’t pay employees
- Employees aren’t working reduced hours, and
- An employee has not self-quarantined.
Again, there’s a caveat: the employer must already be registered with UIF, and the closure must be directly linked to COVID-19. Retrenchments as a direct result of COVID-19 don’t qualify for TERS.
Some tips on your TERS application:
- Only companies with a staff complement of over 10 need to submit an MOA – do it anyway to avoid any reason for rejection of your application.
- Open a separate bank account online to receive the money for two reasons:
a. This will mitigate the risk that the money is paid into your trading account, so it’s not used to pay debit orders rather than your employees.
b. Funds can be audited for up to five years. Having ring-fenced the money will make it easy to prove what the funds have been used for.
- Post-application, you can expect to receive the funds after 30 days. They must be paid to the employees within five days of receipt.
Initially, the UIF TERS benefits calculation stated that where the employer’s top-up and the UIF TERS benefit exceeded R17 712, the employee did not qualify for a TERS benefit. This caused a whole lot of confusion, and since 10 May, there has been an update: the UIF will now pay additional benefits – even if the employer has paid the employee a certain portion of his or her salary (but the total amount paid to the employee can’t exceed their normal salary).
The good news is that the benefits of employees whose applications were initially rejected will be recalculated, and, employers can now pay their employees top-up amounts without it affecting their TERS claim. Plus, where TERS benefits have not been received at the time of payday, employers may advance funds to the employees, provided there’s a clear audit trail.
If your application for either UIF or TERS isn’t 100% correct you can expect hold-ups, so if you need an expert to guide you, that’s what we’re here for.
Don’t let forms and confusion get on your last nerve; contact us today.