UIF Increases TERS Budget to R2.4 Billion to Prevent Job Losses and Support Businesses

The Unemployment Insurance Fund (UIF) has significantly increased its Temporary Employer-Employee Relief Scheme (TERS) budget to R2.4 billion for the 2025 financial year. This marks a massive jump from the R400 million allocated in the previous year. The move aims to prevent retrenchments and support struggling businesses amid ongoing economic uncertainty.

Why the UIF Increased the TERS Budget

South Africa has faced rising unemployment and financial strain, with businesses struggling to stay afloat. According to the Commission for Conciliation, Mediation and Arbitration (CCMA), 38,428 employees were at risk of retrenchment in the 2023/2024 financial year. However, thanks to interventions like TERS, 14,887 jobs (39%) were saved.

In a statement, the UIF said:

“With the increase in the TERS budget, the UIF is taking a proactive response to volatile economic trends that threaten the livelihoods of workers and the sustainability of businesses.”

By expanding the budget, the UIF aims to provide financial relief to more companies and employees, ensuring that more salaries are covered and fewer people are laid off.

How the Expanded TERS Budget Will Help Workers and Businesses

TERS is a salary support scheme that helps businesses in financial distress by covering employee wages for up to 12 months. This allows employers to focus on restructuring and recovery while only being responsible for social costs such as provident fund and medical aid contributions.

The increased funding means:

• More employees will receive salary support, reducing layoffs.

• Businesses will have extended financial relief, preventing closures.

• Industries in retail, manufacturing, hospitality, tourism, and logistics will receive greater support.

According to the UIF, TERS has already played a crucial role in keeping businesses afloat, and this budget increase will further expand its reach.

Who Can Apply for TERS Assistance?

Employers seeking TERS relief must provide the following documents:

• Audited financial statements for the last two financial years.

• Independently reviewed financial statements (if the company is not required to be audited).

• Recent management accounts (if financial statements are older than three months).

• Termination of contract and bank statements (for individual applicants).

• A business case explaining financial distress and proposed solutions.

Employers can visit the CCMA’s official website for more details on TERS applications.

Economic Outlook and Job Security

While the UIF’s increased TERS budget is a positive step for job security, South Africa’s economic challenges remain. Many businesses continue to face rising costs, sluggish growth, and potential tax increases, such as a 1% VAT hike over the next two years.

The hope is that the additional R2.4 billion funding will provide stability to businesses and workers, helping them navigate financial uncertainty.

For businesses struggling to keep employees on payroll, TERS could be a vital lifeline.

{Source The Citizen}

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