- The Temporary Employer/Employee Relief Scheme has been extended to 15 March 2021 and claimants will be able to apply for retroactive assistance dating back to 16 October 2020.
- This extension will only apply to certain sectors which have been hardest hit by lockdown restrictions, as confirmed by President Cyril Ramaphosa and the Unemployment Insurance Fund.
- Businesses and employees in the tourism, hospitality, and liquor industries will be able to apply for financial assistance.
- But the exact conditions of the extension and application process will only be confirmed after engagements with the National Economic Development and Labour Council.
Financial assistance offered by the Unemployment Insurance Fund’s Temporary Employer/Employee Relief Scheme (TERS) will be extended to businesses and workers in certain sectors which have suffered prolonged distress due to lockdown restrictions. The application process originally ended on 15 October 2020 but was recently extended until 15 March 2021.
Consistent calls for the scheme to be extended beyond October were lodged by opposition parties, businesses associations and labour unions. These appeals intensified as South Africa returned to a tighter level of lockdown in December, which persisted throughout January, plunging multiple sectors of the economy into further financial pain.
President Cyril Ramaphosa heeded the calls for an extension and announced, during his State of the Nation Address on Thursday night, that TERS benefits would be reinstated but “only for those sectors that have not been able to operate”.
These specific sectors, businesses and employees will be identified by the National Economic Development and Labour Council (Nedlac). The conditions of this TERS extension will be published following Nedlac consultations.
While South Africans await final details of the extension, the Unemployment Insurance Fund (UIF) has already identified three sectors which stand to benefit from the scheme’s reinstatement.
“It is envisaged that sectors that are not fully operational since the beginning of the lockdown will require and may receive assistance,” explained Makhosonke Buthelezi, the UIF’s Director of Communication and Marketing.
“These include the tourism, hospitality, liquor industry and related sectors within that value chain.”
Importantly, TERS claimants will be able to lodge applications for assistance dating back to 16 October 2020. Additionally, Buthelezi noted that outstanding valid applications submitted prior to Ramaphosa’s announcement would be processed and paid.
“The Fund continuously re-process claims already in the system so that those that have been corrected and have passed validations can be paid when payment re-runs are conducted,” said Buthelezi.
The alcohol industry – which includes manufacturers like South African Breweries (SAB), bars, bottle stores and restaurants – has suffered severe financial losses throughout lockdown due to repetitive liquor bans. According to advisory firm FTI Consulting, South Africa’s alcohol industry has lost R36.3 billion in revenue since the country first entered a National State of Disaster almost one year ago.
The restaurant industry’s losses have been compounded by both alcohol bans and curfews which have limited trading hours throughout the lockdown period. Recent data published by Statistics SA shows that income generated by restaurants and coffee shops in November 2020 had dropped by more than 51% compared to the previous year.
Similarly, the tourism industry has been dealt two blows. The first, ongoing challenge is presented by the lull in international travel due to global coronavirus restrictions and fears. Although South Africa’s borders are open, dozens of countries have enforced strict travel restrictions on the country due to the discovery of the more infectious 501Y.V2 variant. This makes it much harder for holidaymakers to return to their country of origin after visiting South Africa without having to enter a mandatory quarantine period.
Additionally, South Africa’s tourism industry was battered due to heightened Covid-19 hotspot restrictions which impacted almost all coastal towns and cities. Plettenberg Bay, a popular tourist destination along the Garden Route, is estimated to have lost in excess of R674 million in tourism earnings between the months of October, November, and December 2020, according to Patty Butterworth, the CEO of Plett Tourism.
To date, close to R60 million rand in TERS benefits has been paid to more than 4.5 million workers.
