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24/7 National Hotline: 0860 163 272 | Email: info@neasa.co.za

COVID-19 Lockdown: Banks and UIF TERS funds

May 12, 2020

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… navigating through the COVID-19 LOCKDOWN scandal …

BANKS AND UIF TERS FUNDS

Dear employer

NEASA recently conducted a survey among its members to determine what the issues are regarding the UIF TERS funds deposited into the accounts of employers/companies and then being utilised for other, non-designated purposes such as banking fees, interest on overdraft accounts, loan repayments etc.

After communication with the affected members and the major banking institutions, the following issues were identified:

  • the directives and regulations, as issued by government, determines that the opening of a special or additional bank account, for the purposes of the receipt of the UIF TERS funds by the employer, is not a requirement;
  • however, the banking software operates via automated systems – therefore, when funds are received into an account that is overdrawn, owing banking fees, has accrued interest or is overdue for repayments of a loan (whatever the reason may be), the funds deposited into the account will automatically be applied towards those causes; and
  • this had the effect, in many cases, of the employer not having UIF funds at his disposal in order to pay employees, as the funds were utilised for other purposes.

It is for this reason that the banks urged employers and businesses to open a separate account for the sole purpose of receiving the UIF funds, despite it not being a requirement by law.

However, the regulations remain in force and therefore the employers who have fallen prey to the system should immediately contact their bank managers in order to ensure the release of the UIF funds, so that they may fulfil their obligations to pay employees. The banks, if they do not release said UIF funds, are in contravention of the regulations as issued by government.

NEASA 24/7 NATIONAL HOTLINE: 086 016 3272
legalhotline@neasa.co.za

Regards

 

 

 

 

 

We are all in this together.
Privileged and challenged to be South African.

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