Retrenchments are likely to become even more commonplace in the current economic environment as companies downsize and try to contain costs where possible. If you don’t have retrenchment insurance and need funds to tide you over until you are able to find another job, it can be worth your while to lodge an unemployment insurance fund (UIF) claim. Here’s how.
Sipho was recently retrenched after a his employer, a telecoms company, underwent business restructuring. He is 55 and was employed by the same company for 34 years.
“After being informed that the company intended to reduce staff numbers, I decided to take the severance package at the end of July 2015. However, I did not know the exact time it would take for my pension claim to pay out nor was I aware of the UIF payout process,” says Sipho. Although he was told he would receive his pension payout within one month, four months later he was still waiting for his payout and was relying on his UIF payment to fill the gap.
“I did not use e-filing for UIF and went to the labour office to file a claim. However, after handing in my claim, I have still had not received any payments 12 days later,” Sipho says.
If you are looking to claim from UIF, it helps to understand the process and – most importantly – the time frames. You will only start receiving your benefits up to eight weeks after registering. This is the maximum time it should take for payments to start coming through and you will receive payments every four weeks until your benefits are exhausted.
However, if you have put in an application and have not received any funds after eight weeks, you are advised to return to the department of labour office where you lodged your claim, with all your supporting documents.
Who can claim?
The Unemployment Insurance Fund (UIF) was set up by government to provide interim relief to workers who are between jobs and also to women on maternity leave. You cannot claim UIF under the following circumstances:
- if you were suspended from your job because you committed fraud;
- if you quit your job;
- if you refused training or advice;
- if you already qualify for a benefit from an unemployment fund under the Labour Relations Act;
- if you already receive benefits from the Compensation Fund.
Note that the unemployment officer can request that you go for training or career counselling. If this happens and you fail to attend the training or counselling, your UIF benefits may be stopped.
What benefits do you receive?
UIF will pay you unemployment benefits, illness benefits, maternity benefits and death benefits. Illness benefits can be claimed if you are ill for two weeks or longer. Maternity benefits can be claimed if you are pregnant and take maternity leave. You can take maternity leave at any time from four weeks before the expected date of birth and you may not work for a period of six weeks after the birth. Note that you can claim adoption benefits if you legally adopt a child younger than two years old and you leave work to look after the child. However, only one of the adopting parents can apply for benefits. The wife/ husband or minor child of someone who has died can claim death benefits if the deceased contributed to the fund.
How to lodge a claim
You can lodge a UIF claim if your employer goes bankrupt, your contract ends, or you are fired or retrenched. You have to lodge your claim within six months of the date when you stop working. The first step is that you have to go to a department of labour office to sign an unemployment register. You are then required to return every four weeks to sign the register again and show that you still need unemployment benefits. The relevant forms are available directly from the department of labour offices or you can download it from their website. You have to go to a department of labour office in person to lodge your UIF claim and you will need the following documents:
- Your bar-coded identity document or passport;
- Proof of your registration as someone who is seeking work (signing the unemployment register at the department of labour office);
- A service certificate from your employer;
- A copy of your last six payslips;
- A form filled in with your banking details (form UI-2.8);
- A form which shows that you are no longer employed (form UI-19).
How much can you claim?
If you have been paying UIF contributions (deducted from your salary by your employer) for four years or more, then you can claim for up to 238 days or eight months. If you have been contributing for a shorter period, then you can claim one day for every six days that you worked while you were contributing to the fund. If you take maternity leave, you can only claim up to 121 days. The fund pays a percentage of the wage/salary that you earned while you were contributing to the fund. The highest amount that can be paid is 58% of what you earned per day.
The amount that you will be paid is determined differently depending on the amount of your monthly salary. For example, if you earn less than R 12nbsp;478 a month, you will receive approximately 36% -56% of your average monthly salary from the past four years. The higher your salary, the lower the percentage that you will get back. If you earn more than R 12nbsp;478 per month, you will receive a fixed monthly benefit of approximately R4nbsp;250 to R4nbsp;550.