South Africa has an Unemployment Insurance Fund from which employees can claim.
The UIF Fund offers short-term financial assistance to workers when they become unemployed or are unable to work because of illness, maternity or adoption leave.
The fund also assists dependants of a contributing worker who has passed away.
How is the UIF funded?
Every employee pays 1% of their salaries to the fund, and employers match that 1%.
The maximum remuneration on which UIF contributions are calculated is R14 872 per month or R 178 464 p.a. Note that the remuneration threshold is subject to change from time to time.
Employees who earn more than the annual, monthly or weekly maximum earnings ceiling must also contribute to the Fund, but their contributions are worked out on the maximum earnings ceiling which is capped at a 1% contribution value of R148.72 per month.
The onus falls on employers to make sure all workers are registered with the UIF, and they have to make sure that an employee’s contribution is deducted from their salary every month.
If an employee has been registered and the contributions are paid, then that employee will be able to claim from the fund. The employee does not need a card or any other proof that they have contributed to the UIF.
NOTE: An employee doesn’t have to contribute to a UIF if:
- they are employed for less than 24 hours a month with a specific employer
- their contract came about as part of a Skills Development Act initiative
- they are an employee in the national or provincial Government
- they are a traditional healer or member of a municipal council
Who is eligible to claim from the UIF?
All employees who contributed to the UIF can claim if they have been dismissed, retrenched, if their contract has expired, or if their employer is bankrupt.
Domestic workers who have more than one employer can claim if they lose their job with one of their employers or if an employer passes away.
Foreigners who are employed permanently in South Africa also qualify for UIF.
Recent changes in the legislation
The President signed the Unemployment Insurance Amendment Act into law in 2018.
- Payment for the unemployment benefit is for 12 months instead of the previous eight months.
- Maternity benefit will be paid at a flat rate of 66% instead of the previous sliding scale of between 38% and 60%.
- The period within which to submit claims is increased from 6 months to 12 months for unemployment, maternity, illness, and adoption benefits.
- For death benefit, you can file a claim within 18 months.
- Public servants and people in leadership schemes are able to contribute to and claim from UIF.
- Employees who work for reduced hours or short-time will be able to claim for the lost hours.
Other benefits claimable from the UIF:
Illness benefits: If you cannot work because you are sick and you have been booked off for two weeks, you could be eligible. The benefits will be paid from the starting date of when you stopped working.
Maternity benefits: You are entitled to claim while on maternity leave, and can claim for up to 17 weeks of your pregnancy. In the tragic case of a miscarriage, you can claim for 6 weeks after.
Paternity benefits: Fathers are entitled to 10 days leave and claim up to 66% of their earnings from the UIF.
Adoption benefits: If the adopted child is younger than two years of age and you are receiving less money while on adoption leave, you can claim benefits. NOTE: only one parent can claim adoption benefits over this period.
Death benefits: The spouse or child under 18 of a person who has passed away can claim for death benefits provided that the deceased contributed to a UIF fund.
You cannot claim UIF when:
- You were suspended from your job because you committed fraud or another criminal act;
- You voluntarily resigned from your job;
- You refused required training or advice;
- You already qualify for a benefit from an unemployment fund under the Labour Relations Act; and
- You are already receiving benefits from any other scheme established by the Labour Relations Act.