Update on UIF TERS benefits – bank verification, extension and payments:
Please find updated information on the UIF TERS benefits payments, bank verification process, extension of COVID-19 TERS benefits and deadline dates for submission of applications.
Auditor General Report
The recent audit report by the Auditor General (the AG), the First Special Report on financial management of government’s COIVD-19 initiatives: AGSA briefing on the Unemployment Insurance Fund (UIF) Temporary Employee / Employer Relief scheme (TERS) has highlighted the issue of controls, or the lack thereof. Many of the issues raised by the AG was experienced by SAICA members and associates when logging claims.
The AG raised significant findings on overpayments, people paid below the legal age of employment, deceased employees being paid and people that are in prison claiming the TERS benefit.
SAICA has confirmed that all UIF TERS payments have been halted for the time being whilst the UIF is in the process of acting on the AG’s recommendations. This has an impact on employers and employees who are still waiting for their TERS claims to be paid out. The UIF will inform employers and employees once payments recommence.
UIF Call Center
SAICA also confirmed that the UIF Call Center is currently not fully operational due to internal changes.
Bank verification
With regards to bank account verification the UIF implemented a process to verify banking details. When submitting claims employers are asked to either insert the enterprise number (CK / Company number) or the ID number of the bank account holder or the trade name of the employer linked to the banking details in the TERS on-line portal, in order for further payments to be authorised by the UIF. With regards to employers that are not registered companies or close corporations, such as trusts, individuals or non-profit organisations, the UIF could not utilise the confirmation process with the CIPC. The UIF has therefore implemented a manual process where the details are submitted by the employer, downloaded by the UIF and sent to their service provider, which is ABSA. ABSA then confirms the banking details with the various banks, informs the UIF of the verified banking details, the UIF in turn updates the system. This process of bank account verifications has only recently commenced. This process takes between 7 and 14 days. As no payments are being made at the moment, employers who need to follow the manual process of bank detail verification will not be able to see any changes in terms of bank verification on the UIF TERS system. These employers’ (using manual verification) statuses on the UIF TERS system would continue to indicate: “Account Verification not done”.
Deadlines for submission
The UIF informed employers that applications for the March to July 2020 period can still be submitted until 17 September 2020.
The UIF TERS benefits were initially for the period 27 March to 30 June 2020, and were subsequently extended to 15 August 2020 (COVID-19 Temporary Employee/ Employer Relief Scheme (C19 TERS) Direction, GG 43611). The benefits were further extended (COVID-19 Temporary Employer / Employee Relief Scheme (C19 TERS) Direction, GG No 43693 ) from 15 August to 15 September 2020.
The amended Directive, dated 7 September 2020 commenced on 16 August 2020 and will remain in operation for as long as the declaration of COVID-19 as a national disaster subsists or until withdrawn by the Minister of Employment and Labour. The Minister indicated in a media release that the extension is until 15 September 2020.
Applications for the period 1 August to 15 September 2020 close on 30 October 2020.
Categories of employees who still qualify to claim UIF TERS benefit
The amended Directives, dated 11 August 2020 and 7 September 2020 states that the following categories of employees whose employers meet the requirements still qualify to claim the UIF benefit:
1. not permitted to commence operations under the Disaster Management Regulations;
2. unable to make alternative arrangements for vulnerable workers, such as working from home or taking special measures under the OHS Direction to protect them;
3. unable to make use of their services because of operational requirements caused by compliance with the Regulations and Directions such as rostering, staggering working hours, short time and the introduction of shift systems.
This could include employers that could not yet open under the Alert Level 3 and Level 2 Lockdown Regulations, such as gyms and other fitness services providers. It would also include certain employers where employees are working shifts to ensure that the number of employees in the workplace meets the requirements of the Lockdown Regulations.
Compliance with laws and regulations
SAICA has noted with concern that some employers are not acting or paying out employees in terms of the amended Directive. SAICA has been informed that employers are claiming TERS for May and June 2020, and once the benefits are received the employers are informing their employees that the benefits will be used to pay salaries for July and August.
Example:
Employee A worked part time in July 2020.
Normal remuneration is R6 000.
Employer paid R3 000 for 11 days of work.
The UIF sliding scale calculates the benefit to be R1 920. According to the amended Directive, dated 8 April 2020 the minimum benefit to an employee is R3 500.
The UIF will pay a benefit of R3 000 (because the total of the remuneration earned plus the benefit of R3 500 will be more than the employee’s ordinary salary.
The employer needs to pay the R3 000 to the employee for July 2020, and cannot keep this money for payment of the August 2020 salary.
According to the amended Directive, dated 16 April 2020 the TERS benefits can only be set off against paid annual leave or as a set off where the employer paid the employee in advance while claiming the TERS benefit (refer to paragraph 5.4 and 5.5).
In terms of SAICA members’ and associates’ ethical obligations, it is important to note that SAICA members and associates need to act professionally, and this includes complying with the relevant legislation. SAICA members and associates need to take note that, similar to the Auditor General, Registered Auditors and Independent Reviewers need to consider the reporting of Reportable Irregularities, in terms of the Auditing Profession Act 2005 and the Companies Act 2008 respectively. SAICA members and associates that are tax practitioners, compilers of financial statements and members in business need to consider their obligations in terms of the SAICA Code of Professional Conduct’s Non-Compliance with Laws and Regulations provisions.
Additional information
Please note that the COVID-19 Temporary Employee / Employer Relief Scheme directive has been amended numerous times and the directions have to be read together.
• 25 March 2020 – COVID-19 Temporary Employee/ Employer Relief Scheme
• 8 April 2020 – Amended COVID-19 Temporary Employee/ Employer Relief Scheme
• 16 April 2020 – Correction to the Directives of 8 April 2020
• 20 April 2020 – Correction to the Directives of 8 and 16 April 2020
• 26 May 2020 – Amended COVID-19 Temporary Employee / Employer Relief Scheme Directive
• 11 August 2020 – Direction extending COVID-19 TERS benefits for certain categories of employees
• 7 September 2020 – Direction extending COVID-19 TERS benefits for certain categories of employee
• SAICA UIF TERS webpage
• Additional NOCLAR guidance
Regards
Juanita Steenekamp
Project Director: Governance and Non-IFRS Reporting … See more
