Unemployment Insurance Fund (UIF) is short-term monetary assistance given to workers when they get unemployed or are unable to work due to some circumstances such as going on maternity leave, parental leave, or adoption leave, and being ill for a long time. Within six months of losing their job, workers who have been contributing to the fund are required to apply for their UIF benefits. The amount they will be paid depends on how long they had been making the contribution before getting unemployed and how much they were earning as salary. With the UIF calculator, you can deduce how much you can claim as a benefit, and here are useful guidelines on how to calculate your UIF benefits.
What’s The Benefit of Using The UIF Calculator?
The UIF calculator helps workers to deduce the amount they can collect from the fund based on how much they had been contributing to the scheme while they were working. It allows them to calculate how much they are entitled to claim by determining the amount they earn daily. Though the UIF calculator has been helpful to workers in the past years, you should never forget that it only gives an estimate of the amount you can expect to receive from the fund every month if your benefits claim application is successful.
How Much of The Fund Can I Claim?
Those who have been contributing to the Unemployment Insurance Fund for four years or beyond can claim up to 238 days. Then workers who have made contributions for less than four years can only claim one day out of every six days they worked while making contributions to the fund. For the first 238 credit days, the UIF rates are determined by a scale of benefits that range from 30% – 60% of your salary. Then from 239 credit days to 365 credit days, the UIF rate is fixed at 20% of your salary.
Step-By-Step Guide To Calculating The UIF
STEP 1: Calculate your daily remuneration. This can be achieved by multiplying your monthly salary by 12 (months per year) and then dividing it by 365 (days in a year).
For example; If you earned a monthly salary of R12,000, your daily remuneration should be 12000 × 12 / 365 = R395.52 per day.
STEP 2: Work out your claim. You are entitled to one day’s benefit out of every six days of employment.
For instance, if you worked for 192 days before losing your job, divide it by 6 and then multiply the result with your daily remuneration of R395.52 (assuming you earned R12,000) to get your claim. It should be worked out as follows:
192 / 6 = 32, then 32 × 395.52 = 12656.64.
Thus, you will get R12,656.64 as your claim.
NOTE: The higher the monthly salary, the lower the percentage. With the UIF payout system making payments based on the percentage of the worker’s salary while contributing to the fund, the highest amount one can receive from the fund is 58 percent of what they earned daily. Workers who were paid a monthly salary less than R12,478 will likely receive 36% – 56% of their average salary for the four years they made contributions to the fund. Whereas those who earned over R12,478 monthly will get a fixed monthly benefit ranging from R4250 – R4550.
For example, a worker who earned an average monthly salary of R12,477 is expected to receive R145.05 per day. They will then earn about R4,412 per month for nine months. This is just almost 36% of the worker’s earnings.
Then if one was paid up to R20,000 monthly, using the UIF calculation, the worker is expected to be claiming a monthly benefit of about R4,412.33. This falls within the range of R4250 – R4550 stipulated for those earning more than R12,478 per month.
What’s The 2021 UIF Limit?
In May 2021, the UIF monthly remuneration amount was increased from R14,872 per month to R17,712. This was announced by the Finance Minister, Tito Titus, and it became effective from June 1st, 2021. This means that the employee/employer contribution to the fund is limited to R177.12 per month. Before the recent increase, the contribution limit was R148.72 per month, as the monthly maximum remuneration for the Unemployment Insurance Fund contribution was R14,872.
How Much Will I Get Paid By The UIF?
If you wonder how much the UIF will pay you as a benefit, you will have to consider some factors. Most importantly is the amount you contributed from your monthly salary when you were employed. This goes a long way in determining the amount you will receive from the fund. For UIF contributions, employees are expected to pay 1% of their monthly salary, excluding commissions. The amount is usually deducted by the employers, who will also contribute to the fund 1% of each of their employee’s monthly salaries. As a result, a total contribution of 2% percent will be made to the fund for each employee registered with the Unemployment Insurance Fund.
For instance; If a worker is being paid R6000 monthly, then 1% of the salary, which is R60, will be deducted by their employer, who will also contribute 1% of the employee’s monthly salary (R60) to the fund. Hence, each month, a total of R120 will be paid to the UIF.
Note: An employee that earns more than the weekly, monthly, or annual maximum earnings ceiling must also contribute to the fund. For instance, if a laborer is paid a salary of R10,000 monthly and their monthly earning ceiling is R1096, the laborer’s contribution will be removed from the R8,836.
Facts About The UIF Special Scheme For The Pandemic and The Amount You Can Earn
Following the outbreak of the coronavirus pandemic, the UIF claims have been expanded to include workers who had their working hours reduced due to the pandemic. This special UIF scheme for the pandemic can only be claimed by employers on behalf of their employees, as workers cannot claim it directly. They are being paid a percentage of their salaries and can only receive a maximum payment of R6,730. Even though the lowest earners can be paid as high as 60 percent of their salaries, the payment will still be less than R6,730. Workers, who earn more than R17,712, will only get paid about 38 percent of their average salaries.
How Long Does The Claiming Process Take?
To qualify to claim the UIF unemployment benefit, they must make a claim application within six months after the last day of employment. The application process can take a maximum of three hours to be completed. If successful, you will receive your first payment within two to four days after making a claim. However, workers should know that they will be committing fraud if they still claim the UIF benefits while they have started working. On the other hand, employers are cautioned against deducting more than 1% of their employee’s salaries as there exist established laws that spell out penalties for defaulters.