The Department of Labour is following up on COVID-19 TERS payments made to employers to enable them to pay their employees during the pandemic currently crippling the South African economy. This follows great uncertainty and a slew of queries from employers on the process for applying for this benefit as well as how documentation should be completed. A multitude of employers has been paid in excess of employees’ usual monthly salaries, causing confusion on how benefits are calculated and what should be done with these excess funds.
In terms of the latest directive on the COVID-19 temporary employee/employer relief scheme (C19 TERS),’ Subject to the amount of the benefit contemplated in clause 3.6, an employee may only receive COVID-19 benefits in terms of the Directive if the total of the benefit together with any additional payment by the employer in any period is not more than the remuneration that the employee would ordinarily have received for working during that period’.
In short, the UIF benefit added to what the employer paid must not exceed what the employee would normally have earned for working during the period. The Department has however clarified that this does not include leave income used and set off against UI benefits, advances to employees set off against UI benefits, or errors on the part of employers in completing the claim for TERS benefits. It is strictly confined to remuneration earned for work done during the period claimed for the lockdown.
Due to this confusion, the UIF is currently evaluating all the transactions paid for the April period to validate the correctness of payments. Employers are thus being asked to indicate one of a number of options to the UIF in this regard. The possible options set forth are as follows:
Remuneration stated on the claim was Leave income, an Advance, or an Error by the employer to indicate an amount and the employee did not work for the stated period.
Remuneration received was for work done and correctly stated on the claim for the TERS benefit and the employer refunded or will refund any amount above the normal salary to the UIF. The details for repayments are as follows:
First National Bank
Current account number: 514 2005 6925
Branch code: 23-31-45
Reference: C……UIF reference number (e.g. C1234567/7)
Employees did receive more than normal remuneration (TERS benefits plus remuneration for work done) but TERS benefits were paid over to employees, and in such instances:
The UIF will re-calculate the April benefits taking into account the salaries paid by the employee.
If an overpayment is confirmed, UIF will raise debt against the employees.
The Fund reserves the right to deduct the excess and pay only the difference to the employee during the May benefit payments.
The completed forms are to be scanned and emailed to firstname.lastname@example.org and the UIF has indicated that failure to do so could affect May claims for TERS benefits.
This form, unfortunately, does not provide a clear option in terms of payments which were correctly recorded and received without errors. In such an instance, employers are advised not to tick any of the options provided in the letter, and to respond to the cited email address with a statement that all payments were in order and no amendments are required. The employer can use the UIF number obtainable on the UIF website as a reference in their email response.
Download the final letter here.
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