Carol Paton Editor at large
Business for SA says the notices have been signed by employment & labour minister Thulas Nxesi. Picture: TREVOR SAMSON
Business for SA says the notices have been signed by employment & labour minister Thulas Nxesi. Picture: TREVOR SAMSON

The special Covid-19 lay-off benefit that will operate through the UIF was finalised on Tuesday when business, labour and government finally reached agreement on the scheme in Nedlac.

The scheme is the single biggest government initiative to provide relief to those in formal employment who will lose their income due to the lockdown.

The UIF has said that it has R30bn in immediately accessible funds drawn from its accumulated reserves to fund the scheme.

In a statement on Tuesday, Business for SA (B4SA) said the notices based on the agreement have been signed by employment & labour minister Thulas Nxesi and await imminent gazetting. B4SA is a coalition of all business organisations co-operating to deal with the Covid-19 outbreak.

Robert Legh, chair of B4SA’s team on the labour market, said: "We are pleased that we managed to reach a consensus on a scheme that will provide some benefit to those who are losing income during this time of unprecedented crisis, and we hope we have established a system that will be able to deliver these benefits with optimal efficiency."

The Covid-19 Temporary Employer/Employee Relief Scheme (Ters) is open to all employees who along with their employers are contributors to the UIF where the employer has closed operations and employees have lost their income as a result of the pandemic.

The amount of the benefit is based on a sliding scale of between 38% and 60% of earnings, where the lowest paid are at the top of the scale. A floor and ceiling are also in place, with the minimum monthly payment pegged at R3,500 in line with the minimum wage and the maximum at R6,730.

The benefits will be available for up to three months.

An important aspect of the agreement allows employers to supplement these benefits, which is not allowed in other UIF benefit schemes. The maximum that any employee can receive is 100% of their salary. B4SA has appealed to employers to exercise "maximum generosity" during this period.

To simplify the administration an employer with more than 10 employees will apply for the benefit on behalf of its workforce. In companies with fewer than 10 employees, the employees themselves will be able to apply. Bargaining councils will also be entitled to apply on behalf of employees represented by the council, and agreements have been reached in the clothing and textile councils for this to happen

The employer is required to pay the benefit to employees within 48 hours of receiving the monies from the UIF. The UIF will have the right to audit any applying company.

Employers must report the closure of their operations to, after which they will be prompted on how to follow the application process.

With an estimated 80% of the economy shut down, the administration of the benefit will be hugely demanding.

The UIF has 1.8-million employers on its database. If a little over half of all employers apply for the benefit it will need to process a million claims.

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