The money being deducted from your monthly salary or weekly wages is being paid into the Unemployment Insurance Fund (UIF).
Therefore you can access benefits from the UIF should you lose your job, are temporarily unemployed due to illness, pregnancy or while adopting a child under the age of two years. And to provide benefits for families after the breadwinner dies.
Anyone who’s employed and works for 24 hours or more a month including domestic and farm workers is required to contribute to the fund. And the contribution you’re expected to make to the UIF is equal to one percent of your gross remuneration. That’s your salary before any deductions. In addition to the one percent paid by you, as an employee, your employer must contribute one percent making a total contribution equal to two percent of your remuneration.
However, total contributions are calculated at two percent of your gross earnings. Should you earn up to R12 478 a month. The maximum you and your employer can contribute is R249.56 a month.
Therefore the value of the benefit to which you’re entitled depends on what you were earning when you were contributing to the fund and how long you’ve been contributing. As you earn credits, which are based on calendar days and not the actual days you worked. To build up the maximum number of credits, you’d need to be employed for four years.
The rate at which benefits are paid to you also depends on your income. The lowest-paid workers receive benefits at a rate of 58% of their income, while higher-paid workers receive a lower percentage.
If you earn R149 736 a year, or R12 478 a month, or R2879 53 a week, you’ll receive benefits of only 38% of your income and anyone who earns more than these amounts will also receive benefits based on 38%.
A complex formula is used to determine the level of benefits you can receive from the UIF. But the intention behind this is to pay you a benefit that can sustain you during your unemployment.
Source: City Press article, date ended March 1, 2016.