During the past weeks there have been many questions and concerns regarding the TERS fund insofar as to who can claim from the fund, how to claim from the fund and how much can be claimed. We have compiled a summary of the vital information below:
Who qualifies to claim from TERS?
- The employer must be unable to pay salaries to employees.
- The financial distress must specifically be as a result from the lockdown.
- Employers must be registered with the UIF.
- Employers must be formally registered South African businesses.
What is the application deadline?
The TERS benefit is applicable for the 21 days lockdown period and no applications will be entertained once the lockdown is lifted. Employers need to ensure they make application for TERS benefits during the lockdown period. Applications received up and until the final day of the lockdown period will be payable.
How long does it take to process the application?
It is indicated that the turnaround time for processing applications are 10 business days once all completed documents have been received by the fund.
What is the benefit amount?
The calculation of the benefit is based on the last remuneration paid to the employee but is capped by the fund to a maximum of R17,712.00 p/m. The benefit amount is determined in line with the current sliding scale which ranges between 38% (for higher income earners) to 60% (for lower income earners). Since R 17,712.00 is the highest remuneration considered for the benefit calculation, the benefit will be paid at a rate of 38% of R17,712.00, resulting in a maximum benefit of R 6,638.40 for 1 month. The UIF will furthermore take into consideration any remuneration paid by to the employee by the employer during the lockdown period.
How to apply for TERS benefits?
TERS and compulsory annual leave?
The Department of Employment and Labour has announced an amendment to the Temporary Employee/Employer Relief Scheme (TERS) which requires employers to revisit leave arrangements concluded with employees as result of the national lockdown.
The TERS scheme now allows that –
“An employer who has required an employee to take annual leave during the period of the lockdown in terms of section 22(1)(b) of the Basic Conditions of Employment Act, 75 of 1997, may set off any amount received from the UIF in respect of that employee’s Covid-19 benefit against the amount paid to the employee in respect of annual leave provided that the employee is credited with the proportionate entitlement to annual leave in the future.”
This translates as follows:
Employees who have been placed on compulsory annual leave whilst still continuing to receive payment from their employer during the lockdown, is entitled to a reversal and credit of their annual leave insofar as the employer is able to recover this amount from TERS. This will only apply in instances where employers placed employees on compulsory leave and does not extend to instances where employees applied for annual leave and said leave was granted by the employer.
For any assistance with applications, please contact us.
SAIBA: BA (SA) & SAIT: GTP