The Minister of Labour has issued a Directive called the COVID-19 Temporary Employee / Employer Relief Scheme (C19 TERS). This is a special benefit created under the Unemployment Insurance Fund to cater for situations where it will not be feasible to pay employees as a result of the lockdown.
The purpose of this benefit is to make provision for:
- Payment of benefits to contributors who, as a result of COVID-19, have lost income,
- Minimise the economic impact of the loss of income,
- To reduce the contact of individuals during the application process,
The benefit will apply to employees who have lost income or have been temporarily laid-off due to the COVID-19 pandemic but will not apply to employees being paid during the pandemic.
Qualifying Criteria
In order for a company to qualify for the TERS-19, it must satisfy the following requirements:
- The company must be registered with the UIF,
- The company must comply with the application procedure for the TERS-19,
- The company’s closure must be directly linked to the COVID-19 pandemic and lockdown.
Terms and Conditions
- Should an employer as a direct result of COVID-19 close its operations for a period of three months or less and suffer financial distress as a consequence, the employer shall qualify for this benefit.
- The benefit is not linked to the UIF’s benefits and the rules applicable to the accumulation of benefits will not be applicable to the benefit,
- The benefit shall only pay the cost of salary for the employees during the temporary closure of the business subject to the maximum benefit of R17 712.00 per month per employee.
- The employee will be paid in terms of the income replacement rate sliding scale (38% to 60%) as contained the Unemployment Insurance Act 63 of 2001; and
- Qualifying employees will receive a benefit calculated in terms of sections 12 and 13 of the Unemployment Insurance Act, provided that an employee shall receive a benefit of no less than sector specific minimum wage ( ‘flat rate’ of R3500 per month).
- COVID-19 TERS is delinked from all UIF benefits and employees cannot have a dual claim.
- A Dedicated bank account is a requirement for Bargaining Councils that are applying, but not a requirement for company applications. It is a recommendation that companies do use a dedicated bank account.
- If the National Lockdown is longer than 21 days then a second application will need to take place.
- All funds have to be transferred into each employee’s bank account. (No Cash Payments)
- All documents about the claim for TERS need to be kept separate for a duration of 5 year.
Exclusions
- Companies not closed
- Employees on reduced working hours
- Employees under self-quarantine
- Employees under forced quarantine
- Companies busy with retrenchments
Application Process
Employers are required to report the closure to the company to the following email address by sending a blank email to: Covid19tersa@labour.gov.za
Once your email has been received you will receive an automated email with the request for documents
The employer shall be required to furnish the Unemployment Insurance Fund with the following completed documents:
- Letter of Authority, on an official company letterhead granting permission to an individual specified to lodge a claim on behalf of the company,
- MOA (completion of the agreement between UIF, Bargaining Council and Employer)
- Prescribed template that will require critical information from the employer
- Evidence/payroll as proof of last three months employee(s) salary(ies)
- Confirmation of bank account details in the form of certified latest bank statement. All documents submitted will
Once all documents are completed the employer can submit the documents to covid19claims@labour.gov.za
NB: If the spreadsheet is complete; valid and accurate, it will dumped into an automated calculator to produce the benefit amount due to the beneficiaries and the total amount to be transferred to the employer or bargaining council or whichever method agreed.
Time frame
- It is expected that the company will receive the funds within 30 days
- Companies will be required to make payment within 5 days of receiving funds
- Companies need to only follow up with the TERS application only after 30 days
Illness Benefit
Employees who have been quarantine for 14 days due to COVID-19 shall qualify for illness benefit.
Confirmation from both the employer and the employee must be submitted together with the application as a proof that the employee was in an agreed pre-cautionary self -quarantine for 14 days.
Should an employee be quarantined for more than 14 days, a medical certificate from a medical practitioner must be submitted together with a continuation form for payment.
Applications and questions
Contact us on TERS@nel-associates.co.za for a quote or additional information.