Image
Icon

Directory

IconAccounting & Tax
IconActuaries
IconAdministrators
IconAppraisers & Valuers
IconArbitration Services
IconASIB
IconAssessors & Loss Adjusters
IconAssist and Lifestyle Benefits
IconAssociations & Institutes
IconAuditors
IconBBBEE Consulting and Verification Agencies
IconBroker Acquisition Financing
IconBrokers for Brokers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconCall Centre Outsourcing & Sales
IconCompany Secretarial Services
IconCompliance
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconDefensive Driver Training
IconEducation and Training
IconEmergency Medical Rescue
IconFAIS
IconFire, Storm, Flood Damage Specialists
IconForensic Investigation Services
IconHuman Resources
IconIndustrial Cleaners
IconInformation Technology and Software Partners
IconInsurance Companies
IconLegal
IconLightning Damage & Surge Protection Specialists
IconNiche Insurance Products
IconOmbud
IconOutbound Sales
IconOutsourcing Companies
IconPolicy Administration
IconPremium Financing
IconPublic Loss Adjustors
IconPublications
IconRating Agencies
IconReference Books & Material
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconSpecialized Claims Investigations & Assessing
IconSurveys and Research
IconTraining Courses & Workshops
IconUnderwriting Managers
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
IconWholesale Brokers
IconZZZZZZ
Image
  Subscribe To »

Covid-19: TERS - 5 important updates

Published

2020

Mon

04

May

by Joon ChongDhevarsha RamjettanJohan OlivierShane JohnsonBianca ViljoenZipho Tile

 

Since the launch of TERS, there has been (almost) daily changes introduced by the Unemployment Insurance Fund. Important amendments to TERS were gazetted on 8 April 2020. Following those amendments, the Minister of Employment & Labour signed off on further amendments and corrections on 16 and 20 April 2020, respectively. In addition to these changes, the UIF has also publicly released the method of calculation for TERS benefits. We highlight 5 important updates on TERS for employers below.

1. New changes

Although not yet been gazetted, these changes do clarify various questions on TERS -

16 April amendments

20 April correction notice

  • Employees who were placed on forced annual leave during the lockdown period due to a temporary closure of employer operations may claim TERS benefits
  • Annual leave days will be regarded as no income days for purposes of the TERS benefit
  • Upon receipt of the TERS benefit, the employer must ensure that it credits its employees with the proportionate entitlement to annual leave
  • The reference to section 12 of the Unemployment Insurance Act in clause 3.6 of the TERS Directive has been deleted
  • Prior to the deletion, if an employer applied a "top up" and the TERS benefit added to the total remuneration of the employee exceeded R17 712, the UIF determined that such an employee would not qualify for a TERS benefit
  • The deletion enables employees who earn remuneration above R17,712.00 per month and whose employers apply a "top up" to claim TERS benefits
  • The UIF will be recalculating TERS benefits for employees whose claims were unsuccessful

2. Period of TERS cover

At this stage, employers can only apply for the current lockdown period (ie 35 days). However, with a possible extension of the lockdown for certain employers, it may be possible for employers to claim TERS benefits for that period (up to a maximum of 3 months). The UIF has confirmed that employers will be able to apply for TERS benefits for the current period of the national lockdown (i.e. 35 days) after 30 April 2020.

Employers who are not able to operate during the level 4 lockdown may be entitled to claim TERS benefits for the extended period. However, it remains to be seen whether this will actually be the case as the online application process only allows for claims for the current lockdown period.

3. Employers who pay full salaries of employees

Employers who pay full salaries of employees during the lockdown period may qualify for TERS benefits provided that they have paid employees the equivalent of the TERS benefits in advance of receiving payment by the UIF.

The advance payment should be recorded by the employer in some manner (for example, on the payslips of employees or a recordal for internal purposes).

4. Method of calculation for TERS benefits

The TERS benefit per employee will be calculated by the UIF in accordance with the rules of the scheme and by the UIF applying the Income Replacement Rate (IRR) to the employee's daily income. The IRR will range from 38% - 60% depending on the employee's daily income. In order to calculate the TERS benefit per employee, the table below should be used as a guide -

(1) Calculate daily income for the employee

(2) Calculate IRR using UIF formula

In order to calculate the daily income for the employee, use the formulae below depending on whether the employee is a weekly earner or monthly earner

Daily income for weekly earner

Weekly rate of employee x 52 ÷ 365 = daily income

Daily income for monthly earner

Monthly rate of employee x 12 ÷ 365 = daily income

In order to calculate the IRR, use the formula below

IRR = 29.2 + [7173.92 ÷ (232.92 + daily income)]

(3) Calculate daily TERS benefit amount

(4) Calculate total TERS benefit amount

(3) Calculate daily TERS benefit amount Daily income x IRR = Daily TERS benefit amount

Daily TERS benefit amount x number of lockdown days = Total TERS benefit amount

5. Upgrades to online application process

The UIF has recently introduced various upgrades to the online application process to make the process more efficient -

1

 

2

 

3

 

4

Increased transparency as employers, employees and labour organisations will now be able see which companies have been paid

 

Employers will be able to monitor the status of their claims

 

Employers will be able to check the schedule of approved claims which, in essence, shows the amount due to each individual employee

 

Employers who do not know their UIF number can now retrieve this number using their PAYE number

 

The success of a TERS application depends on various factors including the format and date of your application and number of employees included in your application. The UIF is currently inundated with TERS applications. The UIF has said that for applications that meet the requirements, the employer should be paid within 10 business days.

If employers would like to follow up on the status of their TERS application, they can contact the UIF as follows -

TERS continues to be ever evolving. Given that it is new fund established by the UIF on tight timelines, there were bound to be teething issues. Slowly but surely, we are starting to see that the fund is operating more accurately and efficiently and most importantly, in line with its overall purpose of helping employees to avoid losing income during this difficult time.

 

 
Source: NADINE VAN TONDER - TS COMMUNICATIONS
 
« Back to previous page Print this page » |
 

Breaking News »

AUTO & GENERAL INSURANCE PUTS ITS MONEY WHERE ITS MOUTH IS

In these uncertain and unpredictable times, service reliability is crucial. But, how many companies actually practice what they preach, are accountable for their actions, stick to their promises and put ...
Read More »

  

SANDWICH PANELS: A Burning Issue - Understanding the Risk

Sandwich Panel related fires have resulted in major property damage and business interruption losses over the years. What are Sandwich Panels? Sandwich Panels or Composite Panels are structures made ...
Read More »

  

Allianz and Euler Hermes strengthen Africa team

Johannesburg – September 16, 2020 – Allianz Global Corporate & Specialty (AGCS) appointed Asheen Maikoo and Piet Schutte as Senior Risk Engineers on September 1, 2020, to continue ...
Read More »

  

QSURE STEPS INTO COLLECTIONS AND PAYMENTS INDUSTRY AS KEY PLAYER

        Well-known collections and payments company, QLINK Holdings (Pty) Ltd, today announced it has rebranded Insure Group Managers Services (IGMS) to QSURE. Chief Executive ...
Read More »

 

More News »

Image

Healthcare »

Image

Investment »

Image

Life »

Image

Retirement »

Advertise Here
Image
Image
Image
Image
Image
Image
Image
Advertise Here

From The Glossary »

Icon

General Funds:

Unit trusts in this category invest in selected shares across the range of the JSE as well as across the range of large, mid and smaller capitalisation shares. These funds do not subscribe to a theme or investment style. Capital growth over the medium to long term is the investment objective. The benchmark is the JST All-Share Index.
More Definitions »

 

Advertise

 

eZine

 

Contact IG

 

Media Pack

 

RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2020. All Rights Reserved.