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SAICA issues clarification re COVID-19 TERS misunderstanding
- 11 May 2020
- Accounting
- South African Accounting Academy
With the payment of the first COVID-19 Temporary Employee / Employer Relief Scheme (TERS) benefits, various misunderstandings have arisen that have subsequently been resolved.
Since the release of the SAICA media statement and member communication on 24 April 2020 (regarding UIF TERS Top-up calculation), SAICA met with the UIF Commissioner to clarify the requirements and formulae to be used for the benefits of employers and employees.
Employers can now claim the UIF TERS benefit on behalf of their employees who have either lost income or have been required to take annual leave in terms of section 22(10) of the Basic Conditions of Employment Act. Employers who required employees to take annual leave can now set off any amount received from the UIF in terms of the COVID-19 benefit against the amount paid to the employee in respect of annual leave provided that the employee is credited with the proportionate entitlement to paid annual leave in future. Employers can also pay employees based on the directive and set off the payments with the UIF benefit received.
2 Important principles are stated:
- Should the amount of the benefit to which an employee is entitled by applying the UIF’s formula be less than R3 500, the employee will receive the minimum of R3 500.
- For employees earning above the threshold amount of R17 712 per month, the benefit that may be received is the maximum of 38% of R17 712, which is R6 638.40.
UIF confirmed that on the wording of the Directive prior to this correction, the benefit was calculated up to the threshold amount of R17 712 (and not the employee’s actual remuneration). Thus, if the employer’s top-up and the benefit exceeded the amount of R17 712 the employee would not have qualified for a TERS benefit.
SAICA was informed that the UIF will automatically re-calculate the benefits of employees whose applications were rejected on this basis.
The UIF has confirmed the calculations of UIF TERS benefits, and SAICA has provided 4 examples to illustrate this.
References:
SAICA Media statement of 24 April 2020: Click here.
Updated UIF Frequently asked questions: Click here.
Consolidated COVID-19 TERS Directive with all amendments: Click here.