2 August 2020 by Joon Chong and Shane Johnson
The South African Institute of Chartered Accountants (SAICA) hosted a webinar on 30 July 2020 with UIF representatives to discuss the status of TERS. The following is a summary of key points discussed at the webinar. The information below is not yet confirmed by gazetted notices or media statements on the DEL website. If necessary, we will update the information below when these notices or statements are available.
1. Extension of TERS
The TERS Directive as amended currently applies for 3 months only (April, May and June). However, the Department of Employment & Labour (DEL) recently announced that TERS will be extended for an additional 6 weeks, ie from 1 July to 15 August. Employers should apply for TERS in July and August using the same criteria as set out in the TERS Directive. It is not yet clear whether the application period will be for the full 6 week period or whether it will be split into two separate application periods: July and August. This should be clarified in the amendments to the TERS Directive which are yet to be gazetted or published on the DEL website.
2. April and May TERS application process to close for new applications
The UIF has indicated that the April and May application process for TERS will close on 30 July 2020 for new applications. In other words, from 1 August 2020, the UIF will not accept any new applications for the April and May periods for TERS. We are concerned that no notices or media statements from the UIF is yet available
The UIF has confirmed that backlogs of applications of employers who have already applied for the April and May periods will still be processed. We are uncertain if this means employers who are already registered on the UIFECC website (i) can still add new employees for April or May 2020; or (ii) only the employees for April and May 2020 who have been uploaded by 30 July 2020 will be processed, including where there are errors for these employees. It appears that only backlogs in (ii) would be processed and (i) can no longer be done after 30 July 2020. We recommend that all employers check that they have finalised their applications for April and May 2020 by 30 July 2020.
3. CSV file errors and other TERS application errors
Where an employer uploaded incorrect information in its CSV file, the online UIFECC application system does not process updates if the employer uploads an amended file for employees with ID numbers that have been processed. As it currently stands, employers can only bring this to the attention of the UIF through a manual submission process via email. This is a lengthy process and manual submissions are being processed at a much slower rate compared to the online application system.
The UIF has advised that it is in the process of migrating this manual submission process to the online application process. The UIF predicts that this system will go live by mid-August.
Over and above issues with CSV files, employers will be able to raise all queries or errors with the UIF through this system. Employers will be able to correct errors relating to employee remuneration and leave income. This is a welcome change to the processing of errors in the applications. Employers should look out for the change on the UIFECC website and reload the corrected csv files and raise queries online as soon as the change has been implemented.
4. Bank account verification issues
Many employers have experienced issues in verifying their bank accounts through the online application process. The UIF introduced this leg to the process in order to ensure that TERS benefits are paid into the correct bank accounts so that it can reach the intended recipients.
The bank account verification process distinguishes between banks that are part of the process (eg Standard Bank) and banks that are not part of the process (eg Discovery Bank). The UIF is quickly able to verify bank accounts (within 24 to 48 hours) with those banks that are part of the process. It is more cumbersome for the UIF to verify bank accounts with those banks that are not part of the process. This is a manual process and the UIF uses ABSA bank (as one of its service providers) to make contact with the relevant bank to verify the banking account. This process generally takes between 7 to 14 days. To shorten this process, the UIF has asked for the National Treasury to assist with initial screening to verify bank accounts with banks that are part of the process. If National Treasury verifies the bank accounts, the TERS application will be processed. If they do not, the bank account will be sent through the manual process (via ABSA bank).
Once the bank account has been verified, employers are not permitted to change these details. It is only where the bank account verification has failed where employers will be given the opportunity to rectify the error(s) as indicated by the UIF on the online application system.
5. Risk block on TERS applications
In certain instances, employers have been notified of a “risk block” attached to their TERS online applications. The UIF has confirmed that the risk unit will be sending a communication to these employers to outline the process and information required in order to remove the risk block.
6. Foreign employees – outstanding declarations
According to the UIF, over 200 000 foreign employees still remain unpaid in the TERS system.
In order to resolve this issue, the UIF is working with a company called Interfile to obtain the outstanding UIF declarations for foreign employees. Once this information has been obtained, the UIF will process the applications. However, it is important to note that this it is only possible for the UIF and Interfile to do this if the employer has an existing uFiling account (www.ufiling.co.za/uif/).
The UIF is still addressing the technical issues experienced by employers in registering on the uFiling system. In addition to raising these issues through the uFiling system, employers can also contact individual provincial offices and labour centres to assist in capturing outstanding declarations for foreign employees.
7. Employees employed after March
The UIF has confirmed that such employees do qualify for TERS benefits if they have lost income as a result of the Covid-19 pandemic due to a total or partial closure of the employer’s business.
8. Review by audit firms
To uphold the principle of accountability, the UIF is currently in the process of appointing a panel of audit firms. This panel will likely be appointed by the end of August and it will be responsible for reviewing all TERS transactions. The panel will be responsible for conducting two review processes –
In light of this development, it is crucial that employers keep proper records in respect of the TERS applications.
To date, the UIF has paid out close to 35 billion ZAR in TERS benefits ultimately benefitting over 7 million employees across South Africa.
Joon Chong is a partner and Shane Johnson is a professional support lawyer at Webber Wentzel.
Source: Iol at https://www.iol.co.za/business-report/opinion/ters-8-key-updates-for-employers-5133987b-8fdf-4601-a0f7-c5da76dc37cc