Money is deducted from your monthly salary or weekly wages and paid into the Unemployment Insurance Fund (UIF).
But do you know why you are contributing to this fund, and how and when you can access benefits from the UIF?
The UIF was set up by the government to financially assist people who have lost their jobs, as well as those who are temporarily unemployed due to illness, pregnancy and while adopting a child under the age of two years.
The UIF also provides benefits for families after the breadwinner dies.
Anyone who is employed and who works for 24 hours or more a month – including domestic and farm workers – is required to contribute to the fund.
There are a few exceptions to this requirement – mainly people who are employed temporarily and those who are employed by the national or provincial governments.
Your employer is expected to deduct the contributions from your earnings, and failure to do so is an offence punishable with a fine or imprisonment or both.
The contribution you are expected to make to the UIF is equal to one percent of your gross remuneration – that is, your salary before any deductions.
In addition to the one percent paid by you, as an employee, your employer must contribute one percent – making a total contribution equal to two percent of your remuneration.
However, total contributions are calculated at two percent of your gross earnings up to R12 478 a month. So the maximum you and your employer can contribute is R249,56 a month.
Types of benefits you can claim
There are five different types of benefits you can claim from the UIF. They are:
Unemployment benefits; illness benefits; maternity benefits; adoption benefits; and dependant benefits.
The value of the benefit to which you are entitled depends on what you were earning when you were contributing to the fund and how long you have been contributing (see “How our benefit is calculated”).
You must apply to the Department of Labour for unemployment benefits within six months of becoming unemployed if you want to claim unemployment benefits. You can then claim benefits for a maximum of 34 weeks 238 days), depending on how long you have contributed to the UIF.
You cannot claim if you resign from your job, but you can claim if you were on a contract that ended – as long as the employer terminated your services.
In order to claim benefits, you also have to register as a work-seeker with the Department of Labour.
Registering with the Department of Labour as a work-seeker means that suitable employment, where available, will be offered to you. The department will contact you should suitable employment become available.
If you refuse any employment offered and your refusal is regarded as unreasonable, you may lose your benefits, or they may be suspended.
You are no longer required to report to the Department of Labour on set dates, as was the case in the past, in order to receive benefits.
If you are ill and are unable to work for 14 days or more and you are not receiving a salary or are receiving only part of your salary, you can claim illness benefits for a maximum of 34 weeks, or 238 days.
When you take maternity leave, you are entitled to claim maternity benefits up to a maximum of 17.32 weeks (121 days). If you have had a miscarriage, you can claim for six weeks (42 days). You are also entitled to claim when your employer is paying you only a portion of your normal wages or salary while you are on maternity leave. You should apply for maternity benefits when your employer stops paying your full wages or salary. If you do not apply within six months of the birth of your child, the benefits will lapse.
You can claim adoption benefits when you adopt a child under the age of two and take unpaid leave or receive only a part of your salary while you are at home caring for the child. Only one of the adopting parents can claim.
You must apply within six months of the adoption order being issued, and you are entitled to benefits for a maximum of 238 days.
If your spouse or life partner who contributed to the UIF dies, you can claim this benefit, even if you are employed. You must apply for the benefit within six months of your spouse or life partner’s death.
A child dependant of the deceased who is under 21, or a child of the deceased who is under 25 and who is a learner and who was wholly or mainly dependent on the deceased, can also claim for this benefit if there is no claim from a spouse.
Dependant benefits are payable for a maximum of 238 days. You must apply within six months and two weeks of the contributor dying.
Not entitled to benefits
You are not entitled to receive benefits from the UIF if:
How your payouts are calculated
A complex formula is used to determine the level of benefits you can receive from the UIF.
The formula is based on the period for which you have been employed and have contributed to the fund, and the income you were earning at the time you became unemployed, or, in the case of maternity benefits, went on maternity leave. In the case of dependant benefits, the income the breadwinner in your family was earning when he or she died is taken into consideration.
You earn credits based on the length of time you have been employed and have contributed to the fund. For every six calendar days for which you are employed, you earn one day’s credit, up to a maximum of 238 days. To build up the maximum number of credits, you would need to be employed for four years. Credits are based on calendar days and not the actual days you worked.
If you have been employed for less than four years, you can still claim from the UIF, but you will only qualify for benefits up to the number of days’ credit you have built up.
The rate at which benefits are paid to you also depends on your income. The lowest-paid workers receive benefits at a rate of 58% of their income, while higher-paid workers receive a lower percentage.
If you earn R149 736 a year, or R12 478 a month, or R2879,53 a week, you will receive benefits of only 38% of your income.
Anyone who earns more than these amounts will also receive benefits based on 38% of R149 736 a year, or R12 478 a month, or R2879,53 a week.
The intention behind this is to pay you a benefit that can sustain you during your unemployment.
How you can apply for assistance
The UIF has a database of all registered employers and employees. This means you do not have to prove that you or a deceased person paid contributions if you apply for benefits, because the UIF will check its database for your identity number or that of the deceased.
To apply for a benefit, you need to take the following document to your nearest Labour Centre:
If you are a spouse or life partner:
If you are a guardian applying on behalf of a child dependant of a deceased breadwinner:
UIF spokesperson Kgomotso Sebetso warns that you are committing fraud if you claim UIF benefits after you have found work. He says the UIF estimates that illegal claims totalling R87 million have been submitted to the fund over the past two years. Of this amount, some R15-million has been recouped.
Sebetso says if you submit a fraudulent claim to the UIF, you could be banned from claiming benefits for up to five years.
If you know that someone is defrauding the UIF, you can report him or her to 0800 60 11 48 or firstname.lastname@example.org
To verify whether your employer has registered you with the UIF, you can contact your nearest Labour Centre. Have your identity number at hand. Alternatively, you can telephone the UIF call centre on 012 337 1680.
This article was first published in Personal Finance, a publication of Independent Newspapers, published in The Saturday Star, The Saturday Argus, The Independent on Saturday and the Pretoria News Weekend.