Way Forward: The COVID-19 Temporary Employee/Employer Relief Scheme

Protecting activities which provide food security during COVID-19
April 23, 2020
Inflated municipal council members’ remuneration – Are tax payers getting value for money?
May 27, 2020

Way Forward: The COVID-19 Temporary Employee/Employer Relief Scheme

Photo by Hal Gatewood on Unsplash

By Saadiyah Kadwa

The COVID-19 Temporary Employee/Employer Relief Scheme (TERS) was amended on April 8th, following complaints that the Scheme was not accessible as it was only available to businesses in financial distress, which incidentally, was not defined in the directive.

The amended TERS directive allows for employers who have had to close their businesses, partially or totally as a result of the lockdown, to apply for the scheme’s benefit. The amendment also clarified that the maximum amount that will be taken into account for calculating benefits is capped at R17 712. This means that where one earns a higher amount and qualifies for the TERS benefit, their actual (higher) salary will not be taken into account for calculating the benefit, the amount of R17 712 will. Employees will be paid in terms of the income replacement sliding scale under the Unemployment Insurance Act. This means that employees will only receive a percentage between 38% – 60% of their salary.

Previously, where an employee’s benefit as calculated on the sliding scale fell below the relevant sector’s minimum wage, the employee would be paid the minimum wage of the sector concerned. However, the amendment states that if the calculated benefit falls below R3500, the employee will be paid R3500 and not the lesser amount. The minimum amount payable is set at R3500 and the maximum at R6730 (38% of 17 712).

Although the above amendments were welcomed and provided clarity on the TERS benefit, there have been recent reports that thousands of applications have not been paid out to employers because the applications received were incorrect. Although the department cannot be blamed for being diligent in ensuring that the information they receive is correct, the large amount of incorrect applications received could be indicative of a flaw in the application process. We call on the department to ensure that they thoroughly assess the incorrect applications and identify the problem, and inform applicants to rectify the applications without delay.

Rejecting applications and asking desperate people to re-apply correctly is not a solution. The department is urged to properly assess the applications received. In instances where the inaccuracy can be easily solved by the official telephonically obtaining the relevant information, then this avenue must be pursued. Where the department can use another department (e.g. SARS) to verify information, it should do so.  Only in cases where the defect in the application cannot be so resolved should the applicant be asked to re-apply.

Comments are closed.