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Lockdown Level 2 And Key Amendments to TERS

Lockdown Level 2 And Key Amendments to TERS

Mark Hewitt

Lockdown Level 2
 
On 15 August 2020, the Minister of Cooperative Governance and Traditional Affairs extended the national state of disaster once more from 15 August 2020 to 15 September 2020.
 
Government Notice No.889, containing the announcement can be found HERE.
 
Later that same day, the President made a detailed statement on the progress made to date with regards to the national effort to contain the COVID-19 pandemic. The President furthermore announced that South Africa will enter “Alert Level 2” effective from midnight on Monday, the 17th of August 2020.
 
The speech of the president can be found HERE.
 
The following key changes will take effect under Alert Level 2:
 
  • All restrictions on inter-provincial travel will be lifted;
  • Accommodation, hospitality venues and tours will be permitted according to approved protocols to ensure social distancing;
  • Restaurants, bars and taverns will be permitted to operate according to approved protocols as to times of operation and numbers of people;
  • Restrictions on the sale of tobacco will be lifted;
  • The suspension of the sale of alcohol will be lifted subject to certain restrictions;
  • Alcohol will be permitted for on-site consumption in licensed establishments only up until 10pm;
  • Liquor outlets will be allowed to sell alcohol for off-site consumption from Monday to Thursday during the hours of 9am to 5pm only; and
  • Restrictions on family and social visits will also be lifted, although everyone is urged to exercise extreme caution and undertake such visits only if necessary;
The following restrictions will remain in place for the duration of Alert Level 2:
 
  • Current restrictions on international travel will remain in place;
  • No gatherings of more than 50 people will be permitted. Among others, this includes funerals and religious events;
  • Spectators will not be permitted at sporting events; and
  • The curfew will remain in place between the hours of 10pm and 4am.
The detailed Regulations applicable to Alert Level 2 have not yet been released at date of publishing of this article, but once released it should be available for reading HERE.
 
AMENDMENTS TO UIF TERS
 
The UIF has made great strides in supporting employees during the Lockdown period through TERS. The UIF has confirmed that is has exceeded the R 40 billion payment threshold. TERS has paid out R 20 billion for April claims, R11 billion for May claims and R9 billion for June claims. July claims are expected to be accepted by the TERS online portal from Monday, 17 July 2020.
 
On 13 August 2020, the Minister of the Department of Employment and Labour released the latest amendments to the TERS via Government Notice No. 878 (the “Directive”). The amendments are applicable for the period 1 July 2020 until 15 August 2020.
 
The Directive containing the amendments can be found HERE.
 
The Directive entails more stringent requirements for an employer or employee to apply for benefits from the TERS. The majority of employers or employees who have previously applied for TERS benefits will no longer be able to apply, as the minimum qualifying requirements could possibly no longer be met.
 
The Directive entails that only the following categories of employees can apply:
 
Employees whose employers are:
 
1. not permitted to commence operations, either partially or in full, under the Disaster Management Regulations under Alert Level 3;
 
The employers/businesses that were not permitted to operate, either partially or in full, from 1 July 2020 until 15 August 2020 can be found HERE.
 
Certain businesses in the tourism and hospitality sector were not permitted to operate in full and may for that reason claim TERS. Gyms, sport facilities, institutions of education, places of worship or event hosting establishments (where more than 50 people would normally gather), conference centres, liquor shops and any establishments selling alcohol and/or tobacco products could also potentially be eligible to apply for TERS.
 
Furthermore, establishments that could not operate past the curfew of 10pm or before 4am, where they normally would, could potentially be eligible to apply for TERS.
 
Whether or not the minimum requirements are met remains to be a subjective approach and the onus is on the employer and/or employee to determine if the requirements have indeed been met.
 
2. unable to make alternative arrangements for vulnerable workers, such as working from home or taking special measures under the OHS Direction to protect them; 

This requirement entails that any employer operating in any sector could be eligible to continue claiming TERS, but only for those employees who are “vulnerable workers” who cannot work.
 
“Vulnerable workers” have been defined as employees:
 
  • with known or disclosed health issues or comorbidities or any other condition that may place the employee at the higher risk of complications or death than other employees if infected with COVID-19; or
  • above the age of 60 years who is at a higher risk of complications or death if infected.
3. unable to make use of their services, either partially or in full, because of operational requirements based on the economic, technological, structural or similar need of the employer caused by compliance with the Regulations and Directions of the Disaster Management Act in particular the need to limit the number of employees at the workplace through rostering, staggering working hours, short time and the introduction of shift systems. 

The above requirement seems to be very limiting as a result of the wording:
 
“in particular the need to…”
 
This requirement seems to only allow employees/employers to claim TERS if that employer could not operate in full as a direct result of the employer having to limit the number of employees at the workplace at any given time. This is because the employer is required to determine its area of floor space and determine how many people may enter the premises ensuring that each person must have a radius of 1.5 metres around him/her.
 
We suspect that further clarification will be released at a later stage with respect to this requirement in order to clarify the exact meaning and scope thereof.
 
We remind our readers that the requirements, as with previous claims, remain intact, being that the employee must have a reduction in income (i.e. not receiving full salary package) and that the employee must be registered with the UIF.
 
The UIF has released an explanatory memorandum as to how exactly the claims process will work, who can apply and what changes to the application information is required to be made in order to submit an accurate and legitimate claim to TERS for the period 1 July 2020 until 15 August 2020.
 
The explanatory memorandum can be found HERE.
The FAQ document, updated for the latest amendments, can be found HERE.
 
For those employees/employers who are still eligible to apply, the following practical amendments to the claims process are important to take note of:
 
  • The Lockdown period is from 1 July 2020 (“Shutdown from”) until 15 August 2020 (“Shutdown Till”). A shorter period can be applied for, but no other dates earlier or later than the aforementioned can be inserted into these columns.
  • In the “Remuneration” column it is critical to note that this column still reflects the remuneration for a normal monthly salary/wage (as with previous TERS claims) even though the period is now for more than a month. The TERS online system will apportion the figure inserted for a six week period.
  • In the “Remuneration Received During Shutdown Period” column, this must reflect the employee’s total remuneration from 1 July 2020 until 15 August 2020 (i.e. for the whole six week period). We remind our readers that “remuneration” for TERS purposes excludes any advances, ex gratia payments or income related to the pay-out of annual leave.
The remainder of the application process will remain the same as with previous months.
 
In the wake of the announcement by the President that South Africa will enter Alert Level 2 and considering that the TERS has paid out R 40 billion of the projected R 45 billion target, it is doubtful that the UIF TERS will be extended past the current closure date of 15 August 2020.
 
It is regrettable that the TERS qualifying requirements have been amended retrospectively as it will certainly limit the number of employees who will be eligible to claim. Employers will need to carefully communicate the latest requirements to their employees who have previously been claimed for, as those employees would have expected further financial support from TERS before the end of August.
 
Lastly, we would like to communicate that the UIF Commissioner has confirmed that the TERS system has been updated to accommodate employees who do not have South African ID numbers. Accordingly, foreigners are expected to receive their claims within a shorter period of time when compared to previous claims.
 
Author: Mark Hewitt from Moore Cape Town’s specialist Tax and Advisory Department