Updates on South Africa’s coronavirus employee relief funding

 ·31 Jul 2020

The South African Institute of Chartered Accountants (SAICA) hosted a webinar on Thursday (30 July) with UIF representatives to discuss the status of the Covid-19 Temporary Employee / Employer Relief Scheme (TERS).

According to law firm Webber Wentzel, the representatives provided information on a number of updates to the TERS and its current implementation. As these updates have not been officially been gazetted, they are subject to change.

Below Webber Wentzel broke down the updates in more detail.

Extension of TERS

The TERS currently applies for three months only (April, May and June). However, the Department of Employment & Labour (DEL) recently announced that TERS will be extended for an additional six weeks from 1 July to 15 August.

“Employers should apply for TERS in July and August using the same criteria as set out in the TERS Directive,” Webber Wentzel said.

“It is not yet clear whether the application period will be for the full 6 week period or whether it will be split into two separate application periods: July and August.

“This should be clarified in the amendments to the TERS Directive which are yet to be gazetted or published on the Department of Labour’s website.”

April and May TERS application process to close for new applications

The UIF has indicated that the April and May application process for TERS will close at the end of July 2020 for new applications.

This means that from 1 August 2020, the UIF will not accept any new applications for the April and May periods for TERS.

“However, the UIF has not issued any notice or media statements in this regard,” Webber Wentzel said.

“The UIF also previously agreed with NEDLAC that a minimum of 14 days’ notice is required from the UIF before closing any application periods. The DEL/UIF should publish further information on this issue on their website / social media pages soon.”

CSV file errors and other TERS application errors

Where an employer uploaded incorrect information in its CSV file, the online UIFECC application system does not process updates if the employer uploads an amended file for employees with ID numbers that have been processed.

“As it currently stands, employers can only bring this to the attention of the UIF through a manual submission process via email,” Webber Wentzel said.

“This is a lengthy process and manual submissions are being processed at a much slower rate compared to the online application system.”

The UIF has since advised that it is in the process of migrating this manual submission process to the online application process. The UIF predicts that this system will go live by mid-August.

“Over and above issues with CSV files, employers will be able to raise all queries or errors with the UIF through this system.

“Employers will be able to correct errors relating to employee remuneration and leave income.”

Bank account verification issues

Many employers have experienced issues in verifying their bank accounts through the online application process.

The UIF said it introduced this leg to the process to ensure that TERS benefits are paid into the correct bank accounts so that it can reach the intended recipients.

The bank account verification process distinguishes between banks that are part of the process and banks that are not part of the process (eg Discovery Bank).

The UIF is quickly able to verify bank accounts (within 24 to 48 hours) with those banks that are part of the process. It is more cumbersome for the UIF to verify bank accounts with those banks that are not part of the process.

This is a manual process and the UIF uses Absa bank (as one of its service providers) to make contact with the relevant bank to verify the banking account.

This process generally takes between 7 to 14 days. To shorten this process, the UIF has asked for the National Treasury to assist with initial screening to verify bank accounts with banks that are part of the process.

If National Treasury verifies the bank accounts, the TERS application will be processed. If they do not, the bank account will be sent through the manual process (via Absa bank).

Once the bank account has been verified, employers are not permitted to change these details. It is only where the bank account verification has failed where employers will be given the opportunity to rectify the error(s) as indicated by the UIF on the online application system.

Risk block on TERS applications

In certain instances, employers have been notified of a “risk block” attached to their TERS online applications.

“The UIF has confirmed that the risk unit will be sending a communication to these employers to outline the process and information required in order to remove the risk block,” Webber Wentzel said.

Foreign employees

According to the UIF, over 20,000 foreign employees still remain unpaid in the TERS system.

To resolve this, the UIF is working with a company called Interfile to obtain the outstanding UIF declarations for foreign employees.

Once this information has been obtained, the UIF will process the applications. However, it is important to note that this it is only possible for the UIF and Interfile to do this if the employer has an existing uFiling account, Webber Wentzel said.

“In addition to raising these issues through the uFiling system, employers can also contact individual provincial offices and labour centres to assist in capturing outstanding declarations for foreign employees.”

Employees employed after March

The UIF has confirmed that such employees do qualify for TERS benefits if they have lost income as a result of the Covid-19 pandemic due to a total or partial closure of the employer’s business, Webber Wentzel said.

Review by audit firms

To uphold the principle of accountability, the UIF is currently in the process of appointing a panel of audit firms.

This panel will likely be appointed by the end of August and it will be responsible for reviewing all TERS transactions. The panel will be responsible for conducting two review processes:

  • ​​​Internal UIF review: To assess whether the UIF processed applications correctly;
  • External employer review: To assess whether employers applied/claimed correctly and met the application criteria.

Comentary by Joon Chong (partner) and Shane Johnson (professional support lawyer) of law firm Webber Wentzel.

Read: New lockdown rules for South Africa – including opening up leisure travel and an updated curfew

Show comments
Subscribe to our daily newsletter