By Marianne Gradwell | Global Business Solutions
The first Covid-19 Temporary Employee/Employer Relief Scheme directive was published on 26 March 2020. The intention of this new Relief Scheme was to financially assist employees who suffered a loss of earnings due to lockdown measures enforced by Government which were introduced to mitigate the Covid-19 pandemic.
For purpose of benefit calculation, advances and leave payments were not regarded as earnings. Rather, TERS benefits – for these periods – could be recovered and leave transactions reversed as soon as the TERS benefits were received.
Initially, benefits were calculated on a sliding scale of between 38% and 60% of remuneration (with a monthly salary cap of R17 712), and a minimum benefit of R3500 (later removed). The proviso was that the benefit amount – plus actual earnings in the period – could not exceed the employees’ normal remuneration. If it did, any excess qualified as an overpayment, and employers were required to refund this portion of TERS benefit to the Unemployment Insurance Fund.
The TERS rules had to be reviewed and adapted as lockdown extended and various circumstances were contemplated as well as addressed. Consequently, several claim periods were defined, starting on 27 March 2020 through to 15 October 2020, with a series of Directives published to guide employers on the rules associated with eligibility and benefit pay-out. During this initial phase more than R50 billion was paid out in benefits. With concerns about the continued viability of the UI Fund, Government announced that no further extension would apply.
This did not deter the social partners (business and labour) who continued to engage with Government at NEDLAC to have the benefits extended, especially as certain sectors were still unable to operate as normal due to curfew, liquor bans and the like. Further, vulnerable employees were still unable to work safely and were suffering financially due to ‘no work, no pay’ principles.
A Welcome Surprise
It was a welcome surprise when President Ramaphosa announced an extension (16 October – 15 March 2021) of the TERS benefits during the 2021 SONA address, albeit with different qualification criteria.
The 2021 directive restricts the qualification of TERS benefits to those sectors that were not yet fully operational during these periods due to lockdown regulatory measures. Examples of these sectors are tourism, hospitality, and liquor. An annexure to the directive provides clarity on all the recognised sectors. SARS Sector Industry Classification (SIC) code verification is used to assess eligibility to claim. For those who do not pass this initial real-time verification, an opportunity to submit a Sector Appeal exists.
For other sectors who continue to have operational challenges, affected employees will have to apply for Reduced Working Time (RWT) benefits, which is submitted via the local Labour Centres rather than via the TERS portal. While the benefit remains the same as for TERS, these applicants will need to use their UIF credit days to qualify.
Currently the only other provisions for TERS benefits outside of the above two scenarios are aimed at all employees (regardless of sector):
Employers who submit applications on behalf of these employees are required to provide proof of registration with the NIOH and upload proof of reporting these employees to the NIOH. Real-time verification of the employers’ NIOH BusinessID will enable qualified employers to make claims and employee IDs are checked against the NIOH database.
Covid-19 and the challenges experienced by those attempting to access TERS benefits have revealed a need for government systems to integrate. Imagine a world where you only have to report a change of name or address once and not have to queue and report the same changes at several different departments? Integrated systems will certainly streamline the TERS processes and eliminate some of the fraudulent claims.
I know that government departments often have a reputation for poor service. I would however like to recognise and thank those officials from the Department of Labour who worked all hours during the lockdown periods to ensure that employees not only received their TERS benefits, but also the “normal” UIF benefits.