Early morning alarms to get us up for work can be irritating, but we’d rather put up with them than wake up to unemployment every day. It’s tough when you lose your job – you still have bills to pay even while you’re wondering when your next payday will be. It’s scary to suddenly have no income, and the Unemployment Insurance Fund (UIF) is in place to help reduce that anxiety.

What is UIF?

UIF is a fund intended to provide short-term relief if you become unemployed under certain conditions, or you become unable to work because of illness, maternity, adoption, or parental leave. It also provides relief to the dependants of a deceased contributor.

UIF is governed by the Unemployment Insurance Act (the UIA) and the Unemployment Insurance Contributions Act (the UICA). If you are eligible and you lose your job, the fund will pay you a portion of your salary every month for a limited period. The length of that period will depend on how long you have been working and contributing to the fund.

As an employee, you must contribute 1% of your salary to UIF and your employer must contribute an additional 1%, making the total contribution 2%. Both employees and employers must make contributions.

However, the following types of employees do not have to contribute:

• Those who work for less than 24 hours a month for the employer.
• Learners.
• Foreign nationals on temporary contracts.
• Employees receiving a monthly state pension (excluding disability or maintenance grants).
• Workers earning only commission.
• National or provincial government employees, like the President, Deputy President, ministers, deputy ministers, and those in other specified government roles.
• Members of municipal or traditional leadership councils.

Do you qualify for UIF?

To qualify for UIF benefits, you must meet the following conditions:

1. You must have been employed and making UIF contributions, whether as a full-time, part-time, or domestic worker.

2. You must be unemployed due to:

• retrenchment,
• dismissal (unless it was the result of your misconduct),
• end of a fixed-term contract,
• your employer becoming insolvent, or
• your employer dying.

3. You must have registered as a work seeker with the Department of Employment and Labour (DEL). 

4. You must be capable of and available for work. 
 

You will not be eligible for UIF if you:

• are suspended from receiving benefits due to working while collecting benefits or committing fraud related to the UIF, or
• have resigned or absconded from work (unless you can prove to the Commission for Conciliation, Mediation and Arbitration that this was the result of constructive dismissal).

How to apply for UIF

Step 1: Gather your documents

Before you apply, make sure you have the following:  

• Your ID or passport.  
• A UI-2.8 form to confirm your banking details.  
• A UI-19 form (completed by your employer) to confirm your employment status.
• Proof that you are registered as a work seeker. 

Step 2: Visit your nearest DEL office  

You must apply in person at your nearest DEL office. Take all your documents with you. They will guide you through the process and provide any extra information you need.  

Step 3: Follow the labour centre’s instructions  

Once you’ve submitted your application, you may be asked to:

• attend training sessions, 
• receive career advice, and/or
• return to the DEL office for follow-ups. 

It may affect your claim if you don’t meet these requirements.  

Why income protection insurance makes sense

UIF provides a limited safety net if you suddenly lose your job, but it’s not a quick or comprehensive solution. Your claim will take time to process, and any other source of income (even a small side hustle) could affect your claim. Even if your claim is successful, the UIF will pay only a portion of your salary for a few months – you may need another source of income to cover the shortfall until you find another job.

Income protection insurance can offer more security when life throws you a curveball. It can help you maintain your standard of living while you hunt for a new steady income. This type of cover ensures you still have money coming in, so you can keep up with your financial commitments without draining your savings or falling into debt.

What income protection insurance covers

Not all income protection policies include the same cover, so always check the terms and conditions of your specific policy. At the very least, make sure your cover includes the following risks:

• Retrenchment: If you lose your job because your employer has downsized, you’ll receive a monthly payout for up to 12 months while you look for new work. 
• Dread disease or disability: If a serious illness or disability stops you working, you’ll still get an income for as long as your condition lasts or until you reach retirement age.

Other ways to safeguard your income

• Business interruption insurance protects freelancers and business owners.
• Life insurance ensures your loved ones are financially secure if you die.
• Credit life insurance covers debt repayments if you lose your income or die.

Your salary is more than just money – it’s your security. Make sure you’re covered when life takes an unexpected turn. Contact Nedbank today to explore our income protection options.