Small and Medium Enterprises (SMEs) in South Africa is a crucial part of our economy and we have to do all in our power to protect these businesses. On the 23rd of March 2020, President Cyril Ramaphosa confirmed that the South African government will utilise the reserves of the Unemployment Insurance Fund (UIF) to support “those workers in SMEs and other vulnerable firms who are faced with loss of income and whose companies are unable to provide support.”

The UIF have confirmed the terms and conditions of the benefits that will be made available to affected employers and employees in terms of the COVID-19 Temporary Employer/Employee Relief Scheme (UIF Covid-19 TERS)

In this article, we explore which businesses qualify for UIF Covid-19 TERS. In addition, we walk through the application process and highlight some warranties and obligations that the employer is entering into when agreeing to the Memorandum of Agreement (MOA) with the UIF.

Who Qualifies for the UIF COVID-19 TERS benefits?

In order for an employer to qualify, the company must:

  • Be registered with the UIF
  • Has had to close its operations (either fully or partially)
    • The closure must be as a direct result of the Covid-19 pandemic
  • The company must comply with the application procedure

Employees must have been in the employer’s employ on 27 March 2020, and have suffered, or will suffer, a loss of income as a result of the closure.

The MOA that needs to be signed in order for the employer to qualify for the benefit, does not define the extent of the loss suffered. The employee only needs to have suffered a loss (less income) as a result of the total or partial close down of their business.

What benefits can be claimed from the UIF COVID-19 TERS scheme?

The value of the benefit is determined according to a sliding scale.

The benefit to employees will be calculated in terms of the income replacement sliding scale of 38 % (for high earners) up to 60 % (for low earners) as provided in the Unemployment Insurance Act, subject to:

  • The maximum threshold which is currently R17712 and
  • a minimum defined as, “not less than the minimum wage”.

The employer can supplement the UIF TERS benefits, but employees may not get their full salary plus the benefit. The maximum that an employee may accordingly recieve (from the UIF and their employer) is 100% of their salary.

The TERS benefit paid by the employer to their employees will not be subject to PAYE, UIF or SDL.

The benefits will be paid for the duration of the shutdown, (and currently capped at a maximum of three months).

How to apply for UIF COVID-19 TERS benefits?

The following process needs to be followed in order to apply and participate in the Covid19 TERS benefit.

  1. Send a short email to The email process is automatic, therefore you do not need to go into detail on the initial email.
  2. An automatic email will be recieved back with full instructions.
    • The online guide (pdf document) in the email is very easy to follow.
    • Log on to
    • Follow the instruction on the online guide
      • Register: Fill in required information to register
      • Log in: Once successfully registered, log in and fill in additional information required
  3. The following documentation will be required
    • Letter of authority from the company. the Letter needs to be on an official company letterhead granting permission to an individual specified to lodge a claim on behalf of the company
    • Period of closure
    • Confirmation of employer bank account (PDF document for upload)
    • List of employees
      • ID numbers
      • Dates of employment
      • Remuneration recieved
      • Proof of remuneration to employees for the previous 3 months
      • For employers employing less than 10 employees (where the UIF will pay these employees directly) employers must also include details of individual bank accounts for their employees.
    • Signed Memorandum of Agreement (MOA)
  4. The agreement will become effective when you receive an approval letter “A3” and receipt by UIF of your acceptance of such an approval letter.

Memorandum of Agreement (MOA)

The essence of your agreement with the UIF is captured in the signed MOA. The MOA needs to be signed in order for your company to qualify for the UIF Covid19 TERS benefits.

The MOA needs to be read carefully. It is important to note the obligations placed on the employer in the relevant MOA that is signed. For example:

  • The employer will immediately inform the UIF on the recommencement of its business operations.
  • The employer will pay its employees their benefits within 2 days of receiving the funds from the UIF
  • The employer will keep a proper audit trail of all funds recieved and benefits paid to employees.
  • The UIF may at any time appoint an auditor or investigator to audit or investigate a suspected breach


If you have any additional questions you are welcome to get into touch with our team directly.