Department of Labour

As COVID-19 has ravaged the economy and stripped it bare of tens of thousands of jobs, there is a real threat to the livelihoods of many ordinary working South Africans. As happens during a time of economic recession, some businesses are unable to pay full salaries, have to scale down and have to let workers go in order to survive the results of stunted economic activity in their industry.

Job loss is never easy. When found in such a precarious position, one difficulty is knowing where one might find the resources to stay afloat and get ready to re-enter the job market. In any case, it is advisable to speak to a registered financial advisor regarding your best course of action as your circumstances require.

Below is an incomplete catalogue of the financial sources that you might be able to utilise during this time:

The Unemployment Insurance Fund (UIF) is specifically set up to aid in these kinds of situations, subject to a few conditions being met. If you had been formally employed, you will probably be a regular contributor to the fund (All employers are required by Labor Law to register themselves and their staff with the UIF and pay their monthly contributions). Apart from the UIF, there are other sources of funds you might consider accessing so that your financial difficulty doesn’t cause irreparable damage.

One of the first considerations when looking for funds is to see where money is still owed to you, and collect any outstanding funds. A common mistake that people make (not only those who are struggling financially) is to wave any money owed to them for the sake of avoiding conflict. While it may lead to some slightly awkward conversations, the place to start is with immediate family and friends. Not only are your family and friends people with whom you have an established rapport, but they are probably the ones most willing to want to help you out of your situation.
You might, however, have available funds or assets that you could free up. Start where that your money and assets act as a surplus to your needs. If you have money in an emergency fund – great, you’ve already planned well for a situation like this.

You might have funds in a savings account that has not been allocated towards a specific purpose and that might be something to consider, although some of these accounts may have a notice period with an exorbitant penalty fee for early withdrawal.

Medical aid saving accounts, although technically being an accessible source of funds, often requires two things – that you resign as a member of the scheme, and wait out the four-month period in which you can still make claims to your medical aid. Not only do you lose your long-term coverage in case of a health emergency, but you will also have to pay a late-joiner fee when joining again and you won’t be able to access the money with immediate effect.

One should be careful of taking out any loans in a time of unemployment or financial distress. Even though a loan might help you get back on your feet, it might be something that will weigh you down for a long time to come.

A vital rule to abide by is not to use funds from a credit facility in order to pay off debt. If you use credit to pay off credit, you’ll be accumulating two sets of interests on the money owed, which leaves you extremely vulnerable.

Lastly, accessing pension funds and other long-term investments should be your last consideration. Any funds that might affect your retirement or the futures of your dependents should, as far as possible, stay untouched. Re-accumulating the wealth necessary for retirement, as well as recuperating the value lost on the interest you would have received, is extremely difficult.

While there are a lot of options to consider when you do find yourself in a tricky financial situation, there are definitely some avenues that will work better for you than others. Knowing exactly what to do requires concentrated research. For this reason, consulting with a financial advisor can ease the process and set you in the right direction to get out with minimal damage.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

As payroll administrators ourselves, we encounter a few frequently asked questions that employers, business owners or those responsible for payroll administration within organisations struggle with. Below we have a detailed answer for you on these burning questions you are facing. We hope that you find them insightful.

Question: At what stage is an employer required to register for PAYE and UIF with the South African Revenue Service?

Answer: An employer is required to register for PAYE and UIF the moment he/she employs an employee whose salary exceeds the tax threshold. For the 2020 tax year, this threshold is R 79 000 per annum.

Question: If an employer is already registered with SARS for UIF, does the employer also have to register with the Department of Labour for UIF purposes?

Answer: Yes. Although UIF payments are made to SARS and not to the Department of Labour, UIF Registration with the Department of Labour still needs to be completed and a UI19 form, in which the employer declares the amounts paid over to SARS, must be submitted monthly. The UI19 form can be submitted via e-mail.

Question: At what stage is an employer required to register for SDL (Skills Development Levy) with SARS?

Answer: An employer is required to register for SDL as soon as the total gross salaries of the organisation (all employees’ salaries) for any 12-month period exceeds R 500 000. Please note that SDL can only be claimed back for training provided from the relevant SETA to which the organisation belongs when the total salaries exceed R 500 000.

Question: I have submitted my W.As. 8 return to the Department of Labour but didn’t receive my W.As. 6 assessment. Why is this happening?

Answer: In most cases where this happens, we find that the e-mail address of the company is completed incorrectly on the return. For many organisations, this has resulted in significant amounts of interest incurred on these amounts. The original returns are no longer sent to organisations via post and are only sent via e-mail.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Surviving the disaster of job loss

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