UIF net extended to all employees regardless of income group

22 May 2002
THE NEW Unemployment Insurance Act that took effect on April 1, 2002, makes provision for all employees to benefit from unemployment insurance in future, regardless of which income group they are in.

As a result, all employees are now required to contribute to the fund.

Under the earlier legislation, employees who earned more than R8 099 per month (or R97 188 per annum), were not required to contribute at all.

From April 1, these employees must contribute, but only up to the current ceiling of R97 188 per annum, since all earnings above this level are exempt.

Both the employer and the employee must each contribute at a rate of one percent per month.

The benefit structure has been changed from the flat rate of 45% to a graduated benefit rate, ranging from 38% for the highest paid worker to 58% for the lowest paid workers. Benefits payable are based on the contributor's average remuneration for the previous six months.

The number of days to which a contributor is entitled is defined as one day's benefit for every six days of completed employment, subject to a maximum of 238 days in the four years preceding the date of applying for the benefit, less any days' benefits already received for this period.

Unemployment contributors are entitled to unemployment benefits for any period exceeding 14 standard days, if certain standard conditions are met. However, unemployment benefits are only payable if the services of the contributor were terminated by the employer. If the worker resigns, no benefits are payable unless the resignation can be deemed to be constructive dismissal.

Maternity benefits have been improved as they have now been de-linked from unemployment benefits and can therefore be claimed without forfeiting the right to other unemployment benefits. Previously, any maternity benefits paid reduced the amount available for a person's unemployment benefits.

Please note that a double deduction for the months of April and May for all new UCT contributors (i.e. those who have not contributed before April 2002) will be made in the May pay run, and will be reflected on the May payslip. Thereafter a single monthly deduction will be made.

Current UIF contributors with medical aid deductions are subject to a small increase in their UIF contributions, effective from April 1, 2002. – Remuneration and administration, HRM

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