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Employees hoping that UIF will be paid by payday

File Image: IOL

File Image: IOL

Published Apr 25, 2020

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Cape Town - Many employers and employees are hoping the Unemployment Insurance Fund (UIF) will pay out benefits linked to Covid-19 wage cuts in time for payday.

To date, R1.8billion has been paid out to employers to cover more than 790 000 workers since April 16 through the Temporary Employer/Employee Relief Scheme.

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However, this figure represents half of the employees in need of relief after 55 268 applications were made to the fund by employers covering more than 1.6million workers.

However, Minister of Labour Thulas Nxesi insisted despite the pressures on the system, the fund has been working on as many applications as possible, weeding out the faulty applications.

The National Employers' Association of SA has been conducting a survey on their members who had applied for the scheme payments and indicated that while slow, there were improvements to the system which initially had a number of challenges.

The association’s Gerhard Papenfus said the other challenge employers were facing was the manner in which the money was being paid out.

“What is happening is that the employer gets the money without a spreadsheet with a breakdown that comes with it to show who is meant to get what,” he explained.

“This means companies and their human resources department will have to work it out, which is not an issue, but this creates a problem for those without an HR to work through at short notice at times given how many companies are still waiting and we are approaching month-end.”

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The UIF payouts are calculated on a salary threshold of R17700 and those earning more than this will get 38% of the threshold amount but if it is less than that the payout is meant to be calculated by a scale used by the fund.

Papenfus said the long-term effects of the lockdown might see more employers requiring UIF once restrictions are lifted due to job losses.

“Employers are going to return to work in May when some companies return and find that they cannot continue operating because (of) the financial toll this period has placed on the business,” he added.

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“The supply chain process has now been contaminated and while it was easy to switch off the economy, we will find that starting it back up will feel like a diesel engine that is slow.

“While we have people sitting at home waiting to see if they get paid at the end of the month, this will be the case in the future with lay-offs and retrenchments that will come.”

While Nxesi said the fund has continued to process payments for ordinary benefits like pregnancy, retrenchments and other paybacks amounting to R804million since the start of this month, many have complained of non payment despite having filed their application before the lockdown.

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