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UIF (Unemployment Insurance Fund)

What is the Unemployment Insurance Fund? | How is the money obtained to operate the Fund and pay benefits? |
Do I have to contribute to the Fund if I am a high earner? | What is regarded as earnings? |
How much should I contribute to the Fund? | How is the rate of benefits determined? |
What types of benefits are provided by the Fund? | What are some of the rules that apply to these benefits? |
What happens if my salary fluctuates every month or every week? | When is a contributor not entitled to receive benefits? |
Who does the UIF act not apply to? | Unemployment Benefits | Illness Benefits | Maternity Benefits | Adoption Benefits |
Dependants Benefits | What documentation do I require when I apply for benefits?

What is the Unemployment Insurance Fund?

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.

How is the money obtained to operate the Fund and pay benefits?

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.

Do I have to contribute to the Fund if I am a high earner?

Yes, 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.

What is regarded as earnings?

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. More information on earnings can be found in the EMP 10 guidelines for employers obtainable from the South Africa Revenue Service (SARS).

How much should I contribute to the Fund?

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%.

How is the rate of benefits determined?

The rate at which benefits are paid is calculated according to a sliding scale of between 38 - 60%.

What types of benefits are provided by the Fund?

The Fund provides 5 types of benefits:

  • Unemployment benefits
  • Illness benefits
  • Maternity benefits
  • Adoption benefits
  • Dependents benefits

What are some of the rules that apply to these benefits?

All contributors that have sufficient credits will be paid a maximum of 238 days benefits, in any period of 4 years, if unemployed. In the case of maternity benefits, a total of 121 days is payable, if sufficient credits are available.

What happens if my salary fluctuates every month or every week?

If your salary or wage fluctuates on a monthly or weekly basis, then the Act says that the average earnings over the last 6 months must be used to calculate earnings.

When is a contributor not entitled to receive benefits?

  • If the contributor is receiving a monthly State pension.
  • If the contributor is receiving payment from the Compensation Fund for illnesses or injuries that caused the temporary or total unemployment of the contributor.
  • If the contributor is receiving benefits from any other scheme established by the Labour Relations Act.
  • If the contributor fails to comply with the provisions of the Law.
  • If the contributor is suspended from receiving benefits because the contributor has been caught working and collecting benefits or has committed fraud.

Who does the UIF act not apply to?

  • employees employed for less than 24 hours a month with a particular employer, and their employers;
  • 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.

Unemployment Benefits

  • Benefits are calculated from the date of unemployment, but paid from the date of application.
  • Benefits are only paid if unemployment is for more than 14 days.
  • Benefits are only payable if the services of the contributor was terminated by the employer. If the worker resigns no benefits are payable, unless the resignation can be deemed to be constructive dismissal.
  • If the company becomes insolvent benefits are payable.
  • The contributor must be registered as a work seeker in terms of the Skills Development Act, 1998, to qualify for unemployment benefits. The contributor must be capable of and available for work.
  • The contributor must report at times and at places that the claims officer determines for the purpose of signing the unemployment register.
  • The contributor must undergo training and vocational counselling if directed by the claims officer. If the contributor refuses without just cause to undergo training, the contributor will not be entitled to benefits.
  • Application for benefits must be made within 6 months of unemployment.
  • Application must be made on a prescribed form.
  • Subject to credits, benefits can be paid to a maximum of 238 days in any period of 4 years.

Illness Benefits

  • Benefits are paid from the date on which the worker ceases to work, because of illness.
  • Benefits that are payable is the difference between what the employer pays and the rate that is prescribed in the benefit schedule.
  • Benefits are only payable in respect of periods of illness lasting longer than 14 days.
  • Application for benefits must be made within 6 months of the illness.
  • Application must be made on the prescribed form, which includes the completion of a medical certificate, by the doctor or recognised homeopath. A medical certificate must be completed in respect of each period of illness that is paid. Subject to credits benefits can be paid to a maximum of 238 days in any period of 4 years.
  • Subject to credits, benefits can be paid to a maximum of 238 days in any period of 4 years.

Maternity Benefits

  • Benefits are payable to a contributor who is pregnant, if an application is made.
  • Benefits that are payable is the difference between what the employer pays and the rate that is prescribed in the benefit schedule.
  • Subject to credits, benefits can be paid to a maximum of 121 days in any period of 4 years. An application for maternity benefits does not affect the contributor's right to unemployment benefits.
  • If there is a miscarriage or a stillborn child, then benefits are paid for a maximum of 6 weeks after the miscarriage/still birth.
  • Application must be made on a prescribed form.
  • An application for maternity benefits must be made within 8 weeks of confinement or within 6 months of the birth of the child.

Adoption Benefits

  • Only one of the adopting parents can apply for benefits.
  • The child must be adopted in terms of the Child Care Act, 1983.
  • The period not working must be spent caring for the child.
  • Benefits are payable from the date on which the Court grants an order for adoption.
  • Benefits that are payable is the difference between what the employer pays and the rate that is prescribed in the benefit schedule.
  • The adopted child must be below 2 years old.
  • Application must be made on a prescribed form.
  • The application for benefits must be made within 6 months of the order of adoption being issued.
  • Subject to credits, benefits can be paid to a maximum of 238 days in any period of 4 years.

Dependants Benefits

Benefits are payable to the surviving spouse or a life partner of a deceased contributor, if an application is made.

  • The application for benefits must be made within 6 months of the death of the contributor.
  • Application must be made on a prescribed form.
  • Any dependant child under 25 years of age is entitled to benefits if there is no surviving spouse.
  • If the surviving spouse does not make an application within 6 months, then a dependant child can apply for the benefits, provided that the application is made within 14 days after the 6 months has expired, during which the spouse should have applied.
  • Subject to credits, benefits can be paid to a maximum of 238 days in any period of 4 years.
  • The benefits payable are equal to the unemployment benefits that would have been paid, if the person was still alive.

What documentation do I require when I apply for benefits?

Unemployment Benefits Illness Benefits Maternity Benefits Adoption Benefits Dependant Benefits Dependant Benefits (children)
13 digit bar-coded identity document or passport 13 digit bar-coded identity document or passport 13 digit bar-coded identity document or passport 13 digit bar-coded identity document or passport 13 digit bar-coded identity document or passport 13 digit bar-coded identity document or passport
Last payslip Last payslip Last payslip Last payslip Last payslip Last payslip
Information supplied by employer (U19) Information supplied by employer (U19) Information supplied by employer (U19) Information supplied by employer (U19) Information supplied by employer (U19) Information supplied by employer (U19)
Proof of Banking Details (UI-2.8) Proof of Banking Details (UI-2.8) Proof of Banking Details (UI-2.8) Proof of Banking Details (UI-2.8) Proof of Banking Details (UI-2.8) Proof of Banking Details (UI-2.8)
  Statement of amount received from employer during period of illness (UI 2.7) Statement of amount received from employer during maternity leave (UI 2.7) Statement of amount received from employer during adoption leave (UI 2.7) Certified copy of marriage certificate Proof of Guardianship
    Doctor's certificate Copy of birth certificate of child   Proof that the child is a learner or was wholly or mainly dependant on the deceased

Page last updated: 21 January 2014