The Unemployment Insurance Fund, also known as the UIF, has come to the rescue for many who find themselves with no source of employment.
If you were terminated by your employer, or are not able to work, you may qualify for UIF benefits. You can immediately apply for UIF unemployment benefits. The UIF provides relief to employees who are not able to work due to maternity leave, parental leave, adoption leave, illness and to dependents of a deceased UIF contributor.
The purpose of the Unemployment Insurance Act No. 63 of 2001 is to ‘establish an unemployment insurance fund, to which employers and employees contribute and from which employees who become unemployed or their beneficiaries, as the case may be, are entitled to benefits and in so doing to alleviate the harmful economic and social effects of unemployment’.
How does it work?
An employer submits UIF contributions on behalf of the worker. The amount contributed monthly is equal to 1% of the remuneration received by the employee. In this case, 1% is paid by the employer and 1% is paid by the employee.
Employers who are registered with the South African Revenue Services (SARS) for Employee tax must also register to contribute to the UIF.
UIF benefits are only available to people who contribute to the fund, and UIF benefits are subject to credits. An employee can claim UIF unemployemnt benefits for 1 out of every 5 days worked.
This means that a person who works for four years will be entitled to 365 or one years worth of credit. The UIF allows for empoyees to build up a maximum of 365 credits. It is important to note that you cannot claim UIF benefits if you resigned, have been suspended or absconded from your place of employment. You can however approach the Commission for Conciliation, Mediation and Arbitration (CCMA) and if it is determined your resignation was constructive.
The maximum earnings ceiling is R17 712 per month or R212 544 annually. For employees who earn more than this amount, their contribution to the UIF is calculated using the maximum earnings ceiling amount.
