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Theme 5 Unemployment Insurance Act, 63 of 2001. Purpose. To provide for the establishment of an unemployment insurance fund to which both employers and employees contribute,
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Purpose • To provide for the establishment of an unemployment insurance fund to which both employers and employees contribute, • And from which employees who become unemployed are entitled to benefits to alleviate the harmful economic and social effects of unemployment.
Definitions • Contributor – a natural person who is/was employed and made contributions in terms of the act. • Child – person under the age of 21 and includes persons under the age of 25 who is a learner and who is wholly or mainly dependant on the deceased. • Domestic worker – person who performs domestic work in the home of his employer and includes a gardener, person employed as a driver of a motor vehicle and a person who takes care of any person in that home, but excludes a farm worker. • Employee – a natural person who receives remuneration in respect of services rendered, but excludes an independent contractor. • Employer – any person who pays any person any amount by way of remuneration , excluding a person who is not acting as a principal. • Remuneration – any amount of money paid, excluding pension, superannuation or retirement allowance or commission.
Application of the Act • Applies to all employers and employees, excluding: • Employed for less than 24 hours per month. • Person employed under the Skills Development Act. • Employees in national and provincial spheres of government. • Person only in the Republic to complete a contract of service. • Persons receiving a monthly pension from the State.
Right to benefits • Contributor – a natural person who is/was employed and made contributions in terms of the act. • A contributor is entitled to: • unemployment benefits, • illness benefits, • maternity benefits, • adoption benefits, • dependant’s benefits.
Domestic employee: • Employed by more than one employer and loses a job, is entitled to benefits, despite still being employed by another employer. • For purposes of calculating benefits the total income derived from continued employment plus benefits my not exceed the benefits that would have been paid if the contributor had become wholly unemployed.
A person who earns in excess of R11 662 per month will be entitled to benefits, but it will be calculated as if he earned the ceiling amount. • A person will not be entitled to benefits for any period that he/she was in receipt of... • A monthly pension from the State • A benefit in terms of COIDA • Benefits from any unemployment fund/scheme established by a bargaining council • If he fails to comply with any provision of the UIA • Or is suspended from receiving benefits ( for submitting a false claim, failure to report resumption of work, etc.)
Calculation of benefits • One day’s benefit for every completed 6 days of employment as a contributor – to a maximum accrual of 238 days’ benefit in the 4 year period immediately preceding the date of application for benefits.
Unemployment Benefits • An unemployed contributor is entitled to unemployment benefits for any period of unemployment lasting more than 14 days if the reason for unemployment is: • Termination of employment by the employer or ending a fixed term contract. • Dismissal • Insolvency • Death of the employer in the case of a domestic worker.
Application must be made in in accordance with the prescribed requirements. • Contributor is registered as a work-seeker with a labour centre. • Contributor is capable and available to do work. • Not entitled to benefits if he fails to report to the claims officer as stipulated. • If the contributor refuses to accept available work, a penalty may be imposed of up to 13 weeks in which no benefits will be paid.
Illness Benefits • A contributor is entitled to illness benefits for any period of illness if: • He is unable to perform work on account of illness; • He fulfils any prescribed requirements in respect of any specified illness; • Application is made in accordance with prescribed provisions (personally or by authorised person, within 6 months); • Illness benefits cannot be claimed for a period less than 14 days and for any period during which she is entitled to unemployment or adoption benefits. • Failure to undergo medical treatment will result in the benefit being forfeited.
Maternity Benefits • Application must be made in accordance with provisions, at least 8 weeks before childbirth. • Maximum period is 17.32weeks • Contributor who has a miscarriage during the 3rd trimester or bears a still-born child is entitled to a maximum benefit of 6 weeks.
Adoption Benefits • Entitled to benefit if a child has been adopted in terms of the Child Care Act. • The period not working was spend caring for the child. • Adopted child is below 2 years of age. • Application must be made in prescribed form, within 6 months after date of court order. • Entitlement to benefits commences on date of court order granting adoption.
Dependants’ Benefits • Surviving spouse or life partner is entitled to benefits if application is made in accordance with prescribed requirements and within 6 months of the contributor’s death. • A child, including an adopted child, is entitled to benefits if there is no surviving spouse or the latter has not applied for benefits within 6 months. Application by dependant made within 14 days after expiration of 6 month period.
Dispute resolution • A person entitled to benefits in terms of the Act may appeal to a regional appeals committee against a decision of: • Commissioner to suspend his right to benefits • Claims officer relating to the payment of benefits • The matter further be referred to the National Appeals Committee.
Duties of employer • Every new employer must provide all necessary business information to Commissioner, and any changes to business information. • Must register all newly appointed employees for UIF benefits.
Unemployment Insurance Contributions Act, 4 of 2002 • Application is the same as for the UIA. • Contributions are paid to SARS within 7 days after the end of the month, together with statement reflecting payments. • Payments are made to Unemployment Commissioner when: • Employer is not required to register/ has not registered voluntarily as an employer with SARS • Employer not liable for payment of Skills Development levy • Every employer must on a monthly basis contribute to the fund: • 1% of monthly remuneration of employee • Not applicable to amount exceeding ceiling amount. • Every employee must on a monthly basis contribute to the fund: • 1% of his monthly remuneration Not applicable to amount exceeding ceiling amount.
Interest, penalties and offences • Interest payable by employer on outstanding amount. • Unpaid contributions – penalty of 10% + interest. • Employers failure to perform duties – additional penalty not exceeding double the amount owed by him. • Offence (liable for a fine or imprisonment for up to 1 year or both): • Fails to pay amount due • Fails to submit statement or disclose information • Hinders or obstructs functions
