TERS relief during lockdown
This blog, the first in a two-part series, will cover the theory surrounding the COVID-19 Temporary Employer-Employee Relief Scheme (COVID-19 TERS) and who qualifies for the benefit.
Due to the COVID-19 outbreak and subsequent national lockdown, many businesses have been forced to temporarily lay-off their employees, leaving them with no income and no way to find another source of income. However, these employees that have been temporarily laid-off are able to apply for the UIF (Unemployment Insurance Fund) relief benefit in order to receive some money to help them pay bills and buy food during this nation-wide lockdown.
The South African government announced that the fund would help both employers and employees who need financial help through the COVID-19 TERS. This is a special benefit created under the Unemployment Insurance Fund, which aims to provide emergency relief to employers so that they may be able to continue paying their employees in the event of temporary lay-offs.
UIF will come into play during the lockdown when an employer has no other option but to close down during the lockdown and subsequently has to temporarily lay-off its employees. This means that the employees will not be paid for the duration of the lockdown. Employers can also claim if they need to introduce reduced working hours which results in employees only getting a portion of their usual monthly salary.
The Unemployment Insurance Act, says the relief scheme is based on a salary up to a maximum of R17 712,00 a month for each employee, who will be paid a percentage of between 38-60%, depending on income. At no time can the salary paid fall below minimum wage.
In order to reduce the number of individual applications that could overwhelm the department of labour, employers were encouraged to apply on their employees’ behalf. However, employees are allowed to apply individually if their employer is not applying on their behalf.
Employees who are unable to work due to the lockdown for three months or less do qualify for the TERS benefit provided:
- The employer is registered with the UIF
- The employer complies with the UIF application procedure
- The company’s closure is a direct result of COVID-19
This was the first blog in a two-part series. The following blog is entitled TERS application process.
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