UIF working for you

Why do we have Unemployment Insurance Fund (UIF)?

The government established the fund to assist those who lost their jobs and is part of the Government’s Social Security programme. The fund is also for those who will not be paid a full salary for a period of time as a result of pregnancy, illness, adoption a child under the age of two years or upon the death of the breadwinner of the family.

Should all workers contribute to the Unemployment Insurance Fund?

All workers, including domestic workers that work for 24 hours or more per month must contribute to the Fund. It is illegal for employers not to make deductions from the worker’s earnings. This Act DOES NOT apply to Public Servants and employees who are paid on a commission basis only.

How much should I contribute to the Fund?

The contribution that should be deducted from your salary is 1% of the total of all earnings, EXCLUDING COMMISSION. In addition to the 1% that the worker pays, the employer also contributes 1% to the worker. The total contribution that is paid to the fund is therefore 2%.

UIF unemployment benefits

The role of the Unemployment Insurance Fund


What are the UIF unemployment benefits that are provided?

The Fund provides 5 types of benefits:

• Unemployment benefits- if you lose your job you must apply within 6 months of becoming unemployed. You can claim benefits for up to 34 weeks ( 238 days)

• Illness benefits- if your services were terminated due to illness and you are ill for more than 14 days and not receiving a salary or receiving only part of your salary from your employer.

• Maternity benefits- when you are due to have a baby you are entitled to 17 weeks (121 days) of maternity benefits. If you have had a miscarriage you can claim for 6 weeks (42 days), Maternity benefits are separate from ordinary unemployment benefits.

• Adoption benefits- when you adopt a child under the age of two years and take unpaid leave or receive only part of your salary while you are at home caring for the child you can claim these benefits. Only one parent may claim.

• Dependant’s benefits- You can apply for these benefits if the person who has been financially supporting the household dies. The spouse of the deceased can claim the benefit even if he or she is employed. The application must be made within 6 months of the date of death of the deceased contributor. If the surviving spouse makes an application within 6 months, a dependent child under the age of 21 years or any person under the age of 25 years who is a learner and who was wholly or mainly dependent on the deceased, can apply for the benefits. The application must be made 14 days after the 6-month period has expired, during which the spouse should have applied.

When is a contributor not entitled to receive UIF unemployment benefits?

• If the contributor is receiving payment from the Compensation Fund for illness 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 resigns from employment.
• If the contributor fails to comply with the provisions of the Act.
• If the contributor is suspended from receiving benefits because the contributor has been caught working and collecting benefits or committed fraud. In this case, the Unemployment Insurance Commissioner may deny a contributor access to the fund for a period of five years.

How does the Fund know from whom the contributions are being received?

The Fund has established an employer/employee database in which all the employment details of workers are stored. The old blue card (UF 74 card) has been replaced by this new electronic system. It is the responsibility of the employer to send the details of all workers to this database on a monthly basis or when there is a change in the details of the workers.
UIF fraud/ risk awareness
It is a punishable offence if clients make themselves guilty of the following:
1. He/ she is in receipt of a salary whilst drawing UIF benefits (‘working and drawing”)
2. Salaries are purposefully inflated by the employer or client to defraud the Fund.
3. The misrepresentation of clients by using fraudulent identification.
4. The forgery of signatures.
5. The incorrect employment dates are reflected to allow the client to qualify for benefits.
6. The client completed his own UI-19 form.
7. Employers supplying non-existent data which cannot be followed up.
8. Change the reason for termination of service to allow the client to fraudulently access the fund.
9. As determined by the Act, alleged perpetrators can be restricted from accessing the Fund for a maximum period of five years.

How will the Fund know how much to pay me when I am Unemployed?

Credits are given to the workers as they work and contribute to the fund. For every six days you have worked you get one day’s credit to a maximum of 238 days. To build up the maximum credit you have to work for 4 years. If you have worked for less than 4 years you can claim for the number of credits you have accrued. The benefit rate ranges from 38% for highly paid workers to 60% for the lowest paid workers. The maximum current ceiling to pay contributions is R12, 478.00 per month.
For further information on UIF Benefits, you can contact

Bernard Reisner:

W.Tel no.: 021-423-3959
Cell: 082-433-8714
Fax: 021-4232105
E-mail: bernard@capelabour.co.za
Website: www.capelabour.co.za