Friday November 21 , 2014

What is UIF

What is UIF

The Government has established the Unemployment Insurance Fund in order to provide short-term relief to workers when they become
unemployed, or are unable to work because of illness, maternity or adoption leave and also to provide relief to the dependants of the
deceased contributor.

The employers and the workers of the labour market finance the Unemployment Insurance Fund, by their contributions, which they make to
the Fund on a monthly basis. The government is the underwriter of the Fund and is expected to provide assistance to the Fund during times
of high unemployment.

All workers except those earning commission only, must contribute to the Fund, irrespective of how much they earn.
The Fund on an annual basis sets a ceiling amount. All those workers who earn above the ceiling will only contribute up to the ceiling
and if they become unemployed will receive benefits at the level of the ceiling. This means that every worker from the lowest level to
the company director must contribute to the Fund.

All money received from the employer, whether in cash or in kind, except for commission is regarded as earnings and contributions must be
paid on them. All allowances that are received are regarded as earnings and are liable for contributions. Examples of allowances are travelling
allowances, entertainment allowances as well as food and accommodation allowances.

The contribution that should be deducted from your salary is equal to 1% of the total of all earnings, commission excluded.
In addition to the 1% that is paid by the worker, the employer also contributes 1% for the worker. The total contribution that is paid is therefore 2%.

The Fund provides 5 types of benefits:

Unemployment benefits
Illness benefits
Maternity benefits
Adoption benefits
Dependents benefits

The UIF act des not apply to Employees employed for less than 24 hours a month with a particular employer, employees who receive
remuneration under a learnership agreement registered in terms of the Skills Development Act, 1998 (Act No. 97 of 1998), and their employers;
employers and employees in the national and provincial spheres of government; persons who enter the Republic for the purpose of carrying
out a contract of service, apprenticeship or learnership within the Republic if upon the termination thereof the employer is required by
law or by the contract of service, apprenticeship or learnership, as the case may be, or by any other agreement or undertaking, to repatriate
that person, or that person is so required to leave the Republic, and their employers.

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