How much do you really know about unemployment insurance?
Unemployment insurance: we have all heard about it and we all see the UIF contribution coming off our pay slip every month, but do we really know what it is?
Understanding UIF
In a nutshell, unemployment insurance is a monthly contribution that you and your employer make to the Unemployment Insurance Fund (UIF), which is managed by SARS. The contributions equal a total 2% of your monthly salary (1% paid by you and 1% by your employer). For example, if you earn R10 000 per month, the employer must deduct R100 (1%). Additionally, the employer must pay R100 (1%) for that worker, bringing the total contribution per month to R200.
The purpose of this insurance is to cover employees for a short-term period if they become unemployed or are unable to work for several reasons including maternity or adoption leave and extended illness. It also provides temporary financial aid to the family of a deceased contributor.
Is it compulsory?
According to SARS, all employees and their employer, are liable to contribute to the UIF. There are, however, certain employees who are exempt from paying – if they meet the following criteria:
- They are employed by the employer for less than 24 hours a month
- They are learners or public servants
- They are foreigners working on a contract who will be returning to their home country once the contract is finished
- Only earn commission
- They are a member of a municipal council, a traditional leader, a member of a provincial House of Traditional Leaders or a member of the Council of Traditional Leaders
Information for employees
When can you claim?
If you have stopped working due to maternity or adoption leave, extended illness or because you have lost your job, you have 6 months from the time you have stopped working to claim from the UIF.
How long can you claim for?
You are able to claim from the UIF from the day you stop working until your benefits run out or until you start working again.
How do you go about claiming?
The forms and documents you will need in order to claim from UIF are dependent on why you are claiming i.e. are you claiming because you are unemployed, on maternity leave or due to serious illness? Once your forms have been filled out, you need to take them, along with other documents (see below), to your nearest labour centre. These forms can be downloaded from www.ezuif.co.za
Unemployment
If you are unemployed you will need the following:
- Your ID or passport
- UI-2.8 for banking details
- A UI-19 form to show you are no longer working
- Proof that you are a work seeker
Serious illness
If you cannot work due to a serious illness you will need the following:
Your ID or passport
- A UI-2.8 for banking details
- A UI-19 form to show you are no longer working
- A U1-2.7 form
- A medical certificate from your doctor
- An in-depth medical report
- A follow up form
Maternity
If you are not working because you are on maternity leave you will need the following:
- Your ID or passport
- A UI-2.8 for banking details
- A U1-2.7 form
- A U-2.13 form
- A medical certificate from you doctor or your child’s birth certificate
- A follow up form
How will I get paid?
All payments will go into your bank account and you will not get taxed for these payments. The amount of money you receive per month is dependent on how long you have been employed for and what your gross monthly salary is. You can work out the full amount of money in your fund by adding all your monthly contributions together.
Information for employers
As an employer, even if you are registered with SARS for Employees’ Tax, you also need to register to pay UIF contributions. All UIF contributions must be paid within seven days after the end of the month during which the amount was deducted from the employee’s salary. If the last day falls on a weekend or public holiday, you then need to pay the contributions on the last working day before the weekend/public holiday.
You can pay through the following methods:
- eFiling
- At an approved bank branch
- At a SARS specific branch