You can now apply for government’s relief fund for May – but don’t make these mistakes

The Department of Employment and Labour says the Unemployment Insurance Fund (UIF) has to date paid in excess of R15 billion to beneficiaries – marking a historic first in terms of a lump sum paid out by the fund within five weeks.

The TERS benefit is one of the social protection schemes introduced by government in direct response to the economic effects of the pandemic.

On 16 April, the fund paid the first batch of Covid-19 Temporary Employer/Employee Relief Scheme (TERS) benefits to employers on behalf of workers.

The Covid-19 TERS benefits were necessitated by the global breakout of coronavirus, resulting in the shutting down of economies due to the introduction of stringent nationwide lockdown measures in a bid to contain the spread of the virus.

The UIF experienced a remarkable spike in the number of applications resulting from loss of income and employment due to trading restrictions, the department said.

Employment and labour minister, Thulas Nxesi, said: “When confronted with a challenge of this magnitude, you either swim or sink. This has been the ultimate test of leadership for almost everyone – whether you are leading an organisation or you are simply expected to contribute towards the flattening of the curve in your personal capacity, we were all called to show up without prior notice.

“Despite several challenges, the UIF continues to experience in executing its mandate to the public, I believe it has risen to the task under extremely difficult circumstances. The noting of achievements is of course not to deny the existence of challenges,” Nxesi said.

He said that the money paid out to beneficiaries thus far has had a direct impact on 3 million workers.

“While the easing of the nationwide lockdown regulations to alert level 3 would see the economy gradually reopening, the negative impact of Covid-19 will continue to be with us for the foreseeable future.

“We expect an increase in labour-related disputes due to retrenchments and termination of employment as employers try to stay afloat. This would undoubtedly place further strain on our ability to meet our social security obligations to the public,” Nxesi said.

The department’s delegation will on Thursday, 28 May, attend a meeting at NEDLAC, where social partners will look at the UIF’s technical and financial capacity to continue to pay out TERS benefits in the long run.

Nxesi said the department needs to guarantee the sustainability of funds beyond June 2020.

Social partners will also look at other issues relating to their mandates and how they can collectively respond to the various challenges within the context of the move to alert level 3.

Nxesi said the department expects social partners to pledge their commitment and support for a return to work strategy that places the safety and welfare of workers above any other interest.

“We go to NEDLAC trusting that we will collectively explore opportunities available to all of us as partners to resolve the multiple and immense challenges presented by the pandemic,” Nxesi said.

Covid-19 TERS applications for May opened at midnight on Tuesday (26 May).

Mistakes mean no-payout

The South African Payroll Association (SAPA), noted that mistakes are being made on the files that are being submitted to TERS.

To date, the UIF’s temporary relief scheme  has paid over R15.7 billion to 2.3 million in its Covid-19 relief payments.

“Many employers, however, are still having their applications rejected,” said Arlene Leggat, executive committee member at SAPA, adding that small, seemingly insignificant discrepancies in submissions are seen as mistakes and will lead to the submission being rejected.

“When the relief scheme was made public, the Department of Labour issued guidelines and templates for the submission of files. Like many government – and other – systems, if the submission isn’t in the exact same format as the templates provided, the submission will be rejected,” said Leggat.

Everything from the date formats to the termination dates must be written in a specific way, precisely as the template stipulates, to avoid the application being rejected by the system.

“There are two different date formats to use in the application, for example. The header date in the application doesn’t have dashes, but the dates in the data section have dashes. Using a comma instead of a decimal point or full stop, for example, will be seen as incorrect by the system. The termination date on the application is also causing a lot of confusion.

“This date refers to people who have left your employ during this period, if they are still employed, it must be blank. Little discrepancies like these have led to many companies’ applications being rejected,” said Leggat.

While the process can be frustrating, Leggat said an employer’s best bet is to download the guidelines that are available on the Department of Labour’s website and do a line-by-line comparison between the template and submission.

“Take the sample template that has been issued on the site, put it next to your file, and go through the submission slowly and diligently to make sure that that you have provided everything in the required format. If your submission is 100% aligned with the sample template, then you should get paid,” said Leggat.

Employers who have had their submissions rejected have become despondent and many have adopted a “what’s the point?” attitude. Leggat said that it’s important to persevere with the application process, even if it is tedious.

“Many businesses are struggling to pay their workers during the pandemic, which is understandable, but the TERS benefit is available to provide relief. It can be frustrating to go through the process, but please keep at it. Your employees depend on you.

“In a country where the vast majority of people spend their salaries within days of receiving it, not having their full salaries is only going to compound the economic problem South Africa faces. At the very least, we need to make sure that people are getting paid what they can,” Leggat said.

Payment

The benefit an employee can receive under this scheme will be capped to a maximum amount of R6,730.56 per month per employee. The maximum salary to be taken into account in calculating the benefits will be R17,712.00 per month and the employee will be paid in terms of the income replacement sliding scale (38%-60%) as provided for in the Unemployment Insurance Act.

The employer must calculate the employee’s daily income. The calculation will depend on whether the employee is a weekly or monthly earner, said  Bradley Workman-Davies, a director at Werksmans Attorneys.

Daily income for weekly earners is calculated by multiplying the employee’s weekly rate by 52 and dividing same by 365. For example: R1000 a week multiplied by 52 (R52,000) divided by 365 equals R142,47 a day.

Daily income for monthly earners is calculated by multiplying the employee’s monthly rate by 12 and dividing same by 365. For example: R15,000 a month multiplied by 12 divided by 365 equals R493,15 a day.

Where an employer’s remuneration is over R17,712, however, then a maximum amount of R17,712 must be utilised to calculate the daily wage.

For example; R17,712 a month multiplied by 12 divided by 365 equals R582,31.