Support for Business – COVID-19 TERS
Please note: The information provided in this blog is correct at the time of writing, but as this is an unprecedented and ever-changing situation, we will do our best to ensure we keep ourselves and our clients up to date. Please check back regularly for updates – we will also notify you of these by email and system notifications.
Update 23 April: We have received confirmation that the TERS benefit paid by employers to their employees will not be subject to PAYE, SDL or UIF. You may pay this amount off-system if you choose, but we recommend waiting until we have updated our system to include a new TERS benefit item. We will send out a notification when the system has been updated.
Update 7 April: DoL has changed the forms required for applications. Please disregard the previous processes outlined and forms / examples attached in this blog. The process outlined in the automated response needs to be followed. Alternatively, you can contact the TERS hotline (012 337 1997) for more information or guidance.
Should you have any queries over the content or processes to follow within this blog, please contact our support team via support@simplepay.co.za.
Opportunities for Businesses to be Supported by the COVID-19 Temporary Employer-Employee Relief Scheme (TERS)
As mentioned in our blog released this morning on Government initiatives to support businesses, this blog is dedicated to giving an overview of the COVID-19 Temporary Employer-Employee Relief Scheme (COVID-19 TERS).
If you have experience with the pre-existing TERS system, it is important you know that the procedure has been altered for COVID-19. The breadth of what can be applied for has been narrowed to employee remuneration only, and the applications should now be made to the Department of Labour instead of the Commission for Conciliation, Mediation and Arbitration (CCMA). Below we will give you further information on the pandemic related scheme.
COVID-19 TERS is a scheme which is aimed at providing support to businesses that are in distress due to the COVID-19 pandemic. If a company has their funding approved, the UIF will fund companies which are directly affected by COVID-19 in the form of a TERS allowance. The default length of funding is for 3 months, but can be extended with prior written consent by both the employer and COVID-19 TERS representative.
In applying for COVID-19 TERS funding, there are some requirements that businesses must meet:
- The company must be registered for UIF.
- The company’s closure must be directly linked to COVID-19, that is to say, it was not already in the process of being wound up before the lockdown.
- The company must comply with the application process, detailed below.
This is considerable relaxation on the standard TERS requirements, where a company needed to be able to demonstrate compliance with the current UIF legislation, or undertake to do so within a stipulated time frame, as well as embarking on a sustainability programme. It is therefore worth reconsidering this scheme if it was not a viable option in the past for your company.
Successful applications will get contributions of between 38-60% towards the employee’s remuneration on a sliding scale, where the percentage contributed decreases, the more the employee earns. In addition, there is a cap on remuneration of R17,712 per month, per employee. Should the determined income be less than the minimum wage for the employee’s sector, an adjustment will be made to give them the minimum wage. It is therefore imperative that forms be filled in carefully and accurately, being double-checked before submission.
How does the Process work?
Update 16 April: The email application is now obsolete. A new online application is now available. Read more here.
In applying to COVID-19 TERS, employers must get the application form and other documents by emailing covid19ters@labour.gov.za. Unfortunately, the contents of this email has changed since this blog was first written. At this moment in time, 7 April, an automated response will come back, providing you with:
- A list of the documents required
- A copy of the “COVID-19 TERS Easy Aid Guide”
- A draft Memorandum of Agreement (MOA) which needs to be filled in with the relevant information and signed
- A template listing critical information required to be filled in by the employer on their employees
- A second template to be filled in by the employer, listing the details of the account intended for the sole use of COVID-19 TERS employee payments
- A guide of how to convert excel spreadsheets to CSV files
The Department of Labour released updated requirements on 7 April. The CSV generated by SimplePay requires a minor change as a result. We are working on this as a top priority and will keep you updated – please see this blog for more.
The TERS application requires two CSVs to be completed, one with comprehensive company and employee information and a second with the employer’s bank details. SimplePay generates the former, which is the more labour intensive while employers will need to manually complete the separate Excel spreadsheet with their own account information. This second spreadsheet must then also be converted to a CSV file, as outlined in the guide.
Once all of the above information is complete in the prescribed format, applications are to be sent to Covid19UIFclaims@labour.gov.za. After the fund has signed off the employer can expect payment as laid out in the MOA.
Advisory Note: One point to note is that the draft MOA*contains several obligations and so needs to be read carefully. It is advisable therefore to negotiate any terms and conditions that would be particularly onerous for yourself to fulfill.
If you are in the position that you have already submitted an application we would recommend that you contact the TERS hotline if in any doubt as to what to do next.
We hope this information aids you in this time of uncertainty, we will continue to do our best to assist you where we can with any queries you may have. Watch this space for new posts on support for the Industrial and Tourism sectors, as well as an unpacking of the new ETI initiative.
Keep well. Stay home. Stay safe.
Team SimplePay
Should you have any queries over the content or processes to follow within this blog, please contact our support team via support@simplepay.co.za.