Unemployment Insurance Fund (UIF) FAQ
Please read some of the Unemployment Insurance Fund (UIF) FAQ for our normal benefits such as Unemployment and Maternity.
Please send email to uif[email protected] to enquire about normal benefit claims
WHAT IS THE UNEMPLOYMENT INSURANCE FUND?
The South Africa Unemployment Insurance Fund has been established to provide short term relief to
workers, subject to certain conditions leading to unemployment.
For instance unemployment due to:
• Retrenchment
• Retirement
• Dismissal
• Illness leave
• Maternity, adoption leave
• Reduced working time and
• Relief to the dependents of the deceased contributors.
2. WHO SHOULD CONTRIBUTE TO THE FUND?
Both employers and employees contribute to the Fund, the following is applicable:
2.1 MUST ALL EMPLOYERS CONTRIBUTE TO THE FUND?
All employers who employ any person and in return provide them with remuneration in
either cash or in kind must register with the Fund as soon as they commence activities as
an employer. It is the responsibility of the employer to register the business and make the
necessary deductions from the remuneration of the workers.
If the employer fails to do this there are severe penalties and interests that will be applied
in terms of the Unemployment Insurance Contributions Act, 2002. If an employer refuses
to register with the Fund and does not want to make the deductions, workers are advised
to contact the nearest office of the Department of Employment and Labour. Employers are
urged to comply with the provisions of the Act, as the Fund provides relief to their ex-workers
who are left with limited and/or no means of support due to their services being terminated.
2..2 SHOULD ALL WORKERS CONTRIBUTE TO THE UNEMPLOYMENT INSURANCE
FUND?
2.2.1 As from 1 April 2002 all workers who work for 24 hours or more per month must
contribute to the Fund.
2.2.2 As from 1 April 2003, the Unemployment Insurance Act requires domestic workers
and their employers to contribute to the Fund.
The following categories of workers are excluded from contributing to the
Unemployment Insurance Fund:
• Workers who work less than 24 hours per month
• The President, Deputy President, the Minister, Deputy Minister, a member of the
National Assembly, a permanent delegate to the National Council of Provinces, the
Premier, a member of an Executive Council or a member of a provincial legislature
• Any member of a Municipal Council, the Traditional Leader, a member of a
provincial House of Traditional Leaders and a member of the Council of Traditional
Leaders
• Workers who earn on a commission only.
2.2.4 All workers that are eligible to contribute must be declared by their registered
employer to the Fund.
3. HOW SHOULD EMPLOYERS SUBMIT DECLARATIONS?
All registered employers should submit declarations, including those that are required to
pay their contributions via SARS. Declarations should be submitted on a monthly basis (by
completing a UI 19 form).
4. SHOULD EMPLOYERS WHO PAY ANNUALLY SUBMIT DECLARATIONS?Yes, once a year or in the event of changes in the particulars of workers.
5. DO YOU HAVE TO CONTRIBUTE TO THE FUND IF YOU EARN A HIGH SALARY?
Yes, all workers, except those mentioned under point 2.2 must contribute to the Fund.
The Fund on an annual basis sets a maximum earnings, which currently stands on R14
872.00 per month. All those workers who earn above the maximum level will only contribute up to the maximum and when they become unemployed will then receive benefits at the rate of their income. This means that every worker from the lowest level to the company director must contribute to the Fund.
6. WHAT IS REGARDED AS REMUNERATION?
All monies received from the employer, whether in cash or in kind. This includes overtime
and bonuses, and contributions must be based on this. In addition, all allowances that are
received are regarded as remuneration. Examples of allowances are traveling allowances,
entertainment allowances as well as food and accommodation allowances. More information
on remuneration can be found in the EMP 10 guidelines for employers obtainable from the
South African Revenue Service (SARS)
7. HOW DOES AN EMPLOYER REGISTER A NEW BUSINESS WITH THE FUND?
• Register on the Bizportal or access www.u filing .gov.za for On-Line Registration
• A UI-54 with unique reference will be emailed or posted confirming the registration
was successful
• Similarly, UI-32 will be posted to confirm the success of the registration of the
employee(s).
8. HOW LONG WILL REGISTRATION PROCESS TAKE?
All registration will be finalized immediately upon registration.
9. WHAT TYPES OF BENEFITS ARE PROVIDED BY THE FUND?
The Fund provides five types of benefits:
– Unemployment benefits (section 17)
– Illness benefits (section 22)
– Maternity benefits (section 25)
– Adoption benefits (section 28)
– Dependants (death) benefits (section 31)
10. WHAT IS THE RESPONSIBILITY OF AN EMPLOYER AFTER THE
TERMINATION OF THE SERVICE OF A WORKER?
• A declaration (electronic, ufiling and UI19 form) form must be completed and returned
to the Fund or any of the Department of Employment and Labour’s offices
• Information of the relevant worker or workers will be updated to show the current
status
• Failure to submit the declaration may cause delays with the processing of claims for
unemployment or other benefits
• Advise ex-workers to approach the nearest office of the Department of Employment
and Labour.
11. WHEN AND HOW DOES THE EMPLOYER PAY THIS CONTRIBUTION TO
THE FUND?
11.1 The employer must pay contributions to the Fund on or before the 7th day of every
month.
Where the 7th day is not a business day, payments must be made before the last business
day. For the purposes of paying contributions those employers who are registered for tax
purposes and/or the Skills Development Levy (SDL), must pay their contributions directly
to SARS. There are various methods of forwarding these contributions to the Fund. (Also
refer to the addresses at the end of this brochure).
11.2 Employers may pay the total annual contributions provided that such amount is paid
up-front.
11.3 The total contributions due must be made within the boundaries of a financial year or
liability period and within seven days after the beginning of that financial year or liability
period. Financial year or liability period means the period commencing on the first day
of March in any year, or from the first day of liability providing such a date falls within a
current financial year, and ending on the last day of February in the following year.
11.4 The employer may not deduct the worker’s share of the total contributions due “up-front”.
Deductions must still coincide with intervals of payment of remuneration.
11.5 In the event of salary increases, this must be reconciled as soon as the salary increase
takes effect and any difference between the amount due and already paid, must be
corrected.
11.6 If employers receive a SARS return form (EMP 201), it means that they are required
to submit their UIF contributions to SARS periods from April 2002 onwards. The Fund
should in these cases be advised of the 10 digit Pay As You Earn (PAYE) reference
number in respect of their business, so that the necessary changes can be made to
prevent the future dispatch of the UI 7.
11.7 Employers must also ensure that the UIF contributions are indicated on the EMP 201
and that payments are forwarded to SARS. The Fund will not accept responsibility, or
engage in any communication with SARS or employers in the event of penalties and/or
interest being raised if payments are submitted to the Fund instead of SARS.
11.8 To avoid unnecessary penalties and interest, employers must ensure that payments
reach the Fund within the prescribed period.
12. WHAT HAPPENS IF REMUNERATION FLUCTUATES/DIFFERS/?
If the remuneration fluctuates/differs on a monthly or weekly basis than the average
remuneration over the last six months must be used to calculate benefits payable.
13. HOW DOES AN EMPLOYER DE-REGISTER WITH THE FUND?
Employers can contact the Fund of any of the Department of Employment and Labour’s
offices and request that the registration be cancelled. The UIF reference number and the
date on which liability ceased, must at all times be quoted. An updated declaration must be
submitted to the Fund on closure of business.
