What is UIF?
The Unemployment Insurance Fund (UIF) provides a little bit of relief to workers who are unemployed or can’t work for reasons like going on maternity leave, adoption leave or being booked off due to illness. The fund also provides temporary financial relief to the dependants of a contributor who has passed away.
You and your employer are both responsible for contributing to UIF but there are certain exceptions. Examples of employees who are exempt from contributing to UIF include those who work for the employer for less than 24 hours per month and those who are employed by national or provincial government.
How does UIF work?
As an employee, you must contribute 1% of the salary your employer pays you to UIF. Your employer must also match the 1% contribution and pay a total contribution of 2% to the fund within a certain period, usually within seven days of salaries being paid.
Effective from the first of October 2012, the maximum earnings ceiling was amended to R14 872 per month or R178 464 per year. If you earn more than this amount, your contributions will be calculated using the maximum earnings ceiling amount. This means that the maximum contribution which can be deducted from your salary if you earn more than R14 872 per month is R148.72 per month.
Employers may not deduct more than this 1% (or the maximum earnings ceiling contribution) or charge a fee for deducting the money. If they fall behind with payments to the UIF, they cannot deduct outstanding amounts from their employees either.
You can only claim UIF benefits if you’ve been contributing to the Unemployed Insurance Fund while working. Benefits will not be awarded if you’ve been suspended, absconded from work or resigned.
In the case of a constructive dismissal, you may also claim if you are unemployed and the Commission for Conciliation, Mediation and Arbitration (CCMA) rules that your resignation was, in fact, a constructive dismissal. This is when an employer changes an employee’s job or working conditions to make them resign.
In order to qualify for UIF benefits, you must register as a work seeker and you must apply for the UIF benefits as soon as you become unemployed or latest within six months of your employment being terminated.
You can also claim benefits if your employers are bankrupt, contracts have ended, or if you are fired.
If you work for more than one employer, you can also claim if you lose your job at one of the employers, or if the employer dies.
To claim, you must just fill in the application forms that are available online. You then hand it in at a labour centre together with the other required documents that are also listed online. Benefit payments will then be paid into your bank account and you don’t pay tax on the benefits.