The short answer
You are supposed to pay UIF contributions until your employee stops working for you.
The whole question
In April 2021, my domestic worker applied for a SASSA older person's grant. I then stopped contributing to her UIF because she would not be able to claim the benefits once she started receiving the grant. She kept working and officially retired in December 2022 due to health complications.
Did I do the right thing by stopping the UIF payments or should I have continued paying them until now? She is now asking for a UI-19 form and I'm not sure what to write as the termination date.
The long answer
As regards your stopping payment of UIF some eight months before she actually stopped working, I think that you should have continued paying UIF up until her actual retirement, as employers are legally required to pay UIF while they are employing a worker. Her actual termination date would be the end of December 2022.
As non-payment is an offence, you can pay the back contributions, and the UIF will levy a 10% penalty on these back contributions. Their finance department will also calculate a daily amount of interest owing (which will vary as there are fluctuations). Only after you have submitted the salary information for the backlog period, can the finance department of the UIF calculate what the amount for interest will be.
For further questions, you can visit the Department of Labour website, or call the UIF at their Call Centre: 012 337 1680 / 080 084 3843 / 080 084 0800.
Regarding the question of whether your domestic worker would be eligible to receive UIF benefits if she was receiving a SASSA old age pension, you are quite right that she would not be eligible for UIF benefits if she was actually receiving the SASSA pension, which of course is not the same as applying for it.
She would be entitled to claim illness benefits from UIF within six months of becoming ill, provided that her illness resulted in absence from work for not less than 14 days, and also provided that she was not already drawing a SASSA pension.
But equally, she would not be eligible for UIF at all if she left your service voluntarily, or if she absconded. If she agrees to the termination of her work – that is, if the termination is not involuntary – she does not qualify. UIF is only paid in the instance of unemployment resulting from retrenchment, dismissal or the death of the employer.
What may create confusion is that social assistance benefits (like the old age pension, disability grant and so on) are distinct from social insurance schemes, like UIF, COIDA (The Compensation for Occupational Injuries and Diseases Act) and provident or pension funds.
To be eligible for a SASSA old age pension, you cannot earn more than R86,280 if you are single, or R172,560 if married, and you cannot have assets worth more than R1,227,600 if you are single, or R2,455,200 if you are married.
Yvette Basson, Law Lecturer at the University of the Western Cape writes in an article for SciELO:
“An applicant or recipient is thus permitted to have an income, as long as the income does not exceed these amounts. Any income received will cause the amount received from the social grant to be adjusted pro rata. The principle applicable here is that once income exceeds these amounts, a recipient is no longer unable to meet their own maintenance needs and the contingency has therefore effectively ended.
“In the case of UIF benefits, the amount payable depends on the amount the employee has contributed to the UIF and for how long they made contributions. The actual individual benefit is paid on a sliding scale based on the recipient's salary. This means that the more an employee earns, the smaller percentage of their salary will be paid in UIF benefits.”
The maximum salary to be eligible for UIF is R17,712 per month.
Wishing you the best,
Answered on Jan. 10, 2023, 10:07 a.m.
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