What is UIF?
UIF stands for Unemployment Insurance Fund and it was set up by government to provide interim relief to workers who are between jobs, and women on maternity leave.
UIF is available to employees who have involuntarily lost their job and income.
The important word here is involuntary. In simple terms, if it was your choice, you don’t get paid, if it was something you did not choose, then you get paid.
How to claim UIF
If you are looking to claim from UIF, it helps to understand:
- the process;
- whether you qualify to claim.
There’s no point getting all your documents together, spending hours in the queue and discovering you don’t qualify for UIF.
Who doesn’t qualify for UIF?
You can’t claim UIF if you lost your job because you committed fraud, or 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 and not you.
You can also claim if your employer goes bankrupt, your contract ends, you are fired or retrenched.
This is very important to note – you have to lodge within six months of the date that you stopped working.
How much will you get paid when you claim UIF?
These two sites have a UIF calculator:
The Department of Labour takes 2 criteria into consideration:
- your salary over the last 4 years, and
- your UIF contributions over the last 4 years
I entered information for someone earning R15 000 who has been working and contributing for the maximum period of 4 years and who is going on maternity leave.
The total that this lady will get paid is R22 000.
This should be paid in four monthly payments of about R5 500 per month.
In reality, the Department of Labour takes up to 8 weeks to approve your claim, so the first payment will be for 2 months (about R11 000) and then followed by 2 more monthly payments of R5 500 each. The above payment examples are estimates and close, but the Department makes the final calculation.
Remember that you no longer qualify for UIF if you start working.
How much do you need to contribute to UIF?
- Employee – 1% of your gross salary
- Then 1% contributed by the employer, so a total of 2% of gross salary is paid to the fund
- The maximum contribution which can be deducted is R148.72 per month, so the max salary is R14 872 per month. It’s an easy calculation
- If you earn R10 000 you pay R100
- If you earn R4 862, you pay R48.62
I am self-employed. Can I claim UIF?
If you are self-employed you cannot register to pay UIF, so business people who are sole traders cannot claim. Most of the professions like doctors lawyers etc who are self-employed, do not contribute and therefore cannot claim. The only situation where you can claim is if you register a company (a separate legal entity) and the company pays you a salary and UIF is deducted, then you can claim.
You don’t have to pay UIF if:
- You are employed by your employer for less than 24 hours a month, or
- If you work for government
All of that said, this could change tomorrow, as there have been changes to the Unemployment Insurance Act.
The Amendment Act was passed in January 2017 but needs to be signed by the president before it can come into effect. So it could be tomorrow or never.
Important changes in the Amendment Act
Public servants will be included in the UIF for the first time.
Women on maternity leave who paid into the UIF for 13 weeks or more will now receive a flat rate of 66% of their salary (up to the maximum benefit of R17 712 per month), instead of 38% to 60%.
These are the main changes. If you want to see all the changes on the new Act, visit www.ufiling.co.za/Home/ActsAndAmendments.
READ MORE: Financial stress in the workplace
- You only get benefits if you lose your job and not if you resign
- You need to claim within 6 months
- You contribute 1% and your employer another 1% with a max of R148.72 per month each
- You don’t pay UIF and can’t claim if you work for the government
- There are changes to the Act, but the president needs to sign before it is implemented
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