Government Financial Relief Funds

1. Temporary Employee Relief Scheme
2. Department of Small Business Development’s Debt Relief Fund
3. SEFA - Emergency Funding package
4. Tax Relief
5. Essential Services Certificate

 

Temporary Employee Relief Scheme (TERS)

Q: What is it?

A: The scheme will enable you to pay your staff directly during the Covid-19 pandemic and avoid having to retrench anyone ie your employees will receive wage payment through the Temporary Employee Relief Scheme (TERS). the UIF may fund your company if you are affected by Covid-19 directly, in relation to the TERS allowance.

Q: How does it work?

A: TERS will function similarly to maternity benefits. If you are still able to pay your staff a portion of their salaries, TERS will top up their salaries up to 100% of their current salaries. The amounts your employees can expect to receive will be between 38% of their salaries (for higher income earners) to 60% of their salaries (for lower income earners). The sliding scale peaks at a maximum of R17 702 per month, which would be a maximum salary of R6 730 per month. The salary your employees receive will never fall below sector minimum wage.  

Q: Do I qualify?

A: TERS will be applicable to your company if your business is: 

  • registered with UIF 
  • compliant with the relevant UIF legislation, and 
  • making your required monthly contributions 

However, should your business not be compliant, you will be able to undertake to pay outstanding contributions, and bring your required declarations up–to–date within a stipulated timeframe. The following applications will be considered: 

  • wage subsidy rulings 
  • over and above wage subsidy and training intervention, and 
  • turnaround solution intervention 

Q: How do I apply?

A:  By submitting documents to the UIF via the dedicated mailbox Covid19claims@labour.gov.za

The key documents have been detailed in different communications and may not be limited to the following: 

  • proof of employment and a list of employees 
  • evidence/payroll as proof of last three months employee(s) salary(ies) 
  • salaries of directors 
  • dedicated bank account 
  • confirmation of bank account details in the form of certified latest bank statement 
  • registration with the Central Supplier Database 
  • power of attorney 
  • turnaround strategy implementation plan 
  • report of progress on the implementation plan 
  • Letter of Authority, on an official company letterhead, granting permission to an individual – specified to lodge a claim on behalf of the company 
  • MOA (completion of the agreement between UIF, Bargaining Council and Employer) 
  • Prescribed template that will require critical information from the employer 

If the spreadsheet is complete, valid, and accurate, it will be moved into an automated calculator to produce the benefit amount due to the beneficiaries, and the total amount to be transferred to the employer, bargaining council, or agreed method. Upon conclusion of the MOA between parties, payment will only be made to you after MOA sign-off between you/Bargaining Council and the Fund. 

Find out more in this guide, or  Forms can be downloaded from the Department of Employment and Labour website: labour.gov.za



 

Department of Small Business Development’s Debt Relief Fund


Q: What is it?

A: The Small Business Development Department of South Africa has announced a debt-relief scheme to benefit SMMEs who are negatively impacted by the COVID-19 pandemic – whether directly or indirectly.

Q: How does it work?

A: Refer to this article on Business Tech

Q: Do I qualify?

A:

  • The business must have been registered with CIPC before 28 February 2020
  • It must be 100% owned by South African Citizens
  • Its employees must be 70% South Africans
  • It must be registered and compliant with SARS and UIF

Priority will be given to businesses owned by women, youth and people with disabilities.

While small and medium enterprises need to ensure their own compliance to secure relief, Seda will assist micro-enterprises with their compliance. If you are a micro-enterprise, you may email Seda for their help at debtrelief@seda.org.za .

Q: How do I apply?

A: You need to register on the National SMME Database at https://smmesa.gov.za, complete the online application form and upload the required supporting documents.

Supporting documents needed:

  • You must supply proof that the business is being negatively impacted by the COVID-19 pandemic
  • Company statutory documents
  • FICA documents (such as a municipal account)
  • Certified copies of the directors’ identity documents
  • Three months of bank statements
  • Latest annual financial statements or latest management accounts (these may not be older than three months prior to your application for relief)
  • Business profile
  • Six months of cash-flow projections where applicable
  • Copy of business lease agreement or proof of ownership if applying for rental relief
  • Employee details including banking details if applying for payroll relief
  • Facility statements of any other funders you may have
  • A detailed breakdown of how you will use the relief funds, e.g. rent, salaries, etc.

 


 

SEFA - Emergency Funding package


Q: What is it?

More than R500 million is available to assist small and medium businesses through three interventions administered by Small Enterprise Finance Agency (SEFA)

  1. Business Growth Facility
    • Production/supply of health care and related products that will be utilized to combat the spread of COVID-19 pandemic. b. Local
    • Production/manufacturing/supply of various products that will be required by the country emanating from a shortage due to COVID-19 pandemic.

  2. SMME Relief Finance
    • Soft loan funding that will keep the existing businesses afloat during the COVID 19 pandemic for 6 months from April 2020
  1. Restructuring of SEFA–funded SMMEs
    • Interventions provided to SEFA funded SMMEs
      Read more here if relevant to you

Q: How does it work?
  1. Business Growth Facility
  • The facility will offer working capital (only direct costs), stock, bridging finance, purchase order finance and capital equipment finance
  • The type of facility as well as the amount required will be based on the funding needs of the business
  • The term of the funding will be determined by the business cash flow and debt sculpting techniques will be utilized
  • Loan facilities will be provided at an interest rate of Prime less 5% pa. It must be emphasized that the business needs will be assessed thoroughly to ensure that the fund is exclusively used for the finance stated in (a), as misuse will not be tolerated under any conditions
  • Business Development Services from Seda, like Products testing, Certification, etc.
  1. SMME Relief Finance
  • The facility will offer working capital only – strictly direct costs which should be auditable
  • Maximum R500k per SMME will be considered depending on requirements
  • The term of the funding will be determined by the business cash flow
  • Loan facilities will be at an interest rate of Prime less 5%. It must be emphasized that the business needs will be assessed thoroughly to ensure that the fund is not used for what is not intended for as any misuse is totally prohibited
Restructuring of SEFA–funded SMMEs

Interventions provided to SEFA funded SMMEs

Read more here if relevant to you

Q: Do I qualify?
  1. Business Growth facility

Qualifying Criteria:

  • Businesses geared to take advantage of supply opportunities resulting from the Coronavirus pandemic or shortage of goods in the local market
  • Company/business must be 100% owned by South African Citizens
  • Company must be 51% black owned
  • Employees must be 70% South Africans
  • Priority will be given to businesses owned by Women, Youth and People with Disabilities
  • Be registered and compliant with SARS
  • Be UIF compliant
  • Registration on the National SMME Database – smmesa.gov.za
  1. SMME Relief Finance

Qualifying Criteria:

  • Businesses which are negatively affected due to the Coronavirus pandemic
  • Company must be 100% owned by South African Citizens
  • Company must be 51% black owned
  • Employees must be 70% South Africans
  • Priority will be given to businesses owned by Women, Youth and People with Disabilities
  • Be registered and compliant with SARS
  • Be UIF compliant
  • Registration on the National SMME Database – smmesa.gov.za

 

  1. Restructuring of SEFA–funded SMMEs

Read more here if relevant to you

 Q: How do I apply?
  1. Business Growth facility and SMME Relief Finance

Submit funding application with www.smmesa.gov.za registration number and supporting documentation to dedicated SEFA email address info@sefa.org.za

  1. Restructuring of SEFA–funded SMMEs
Read more here if relevant to you

 

 

Tax relief


  • A tax subsidy of up to R500 per month for the next four months for employees in the private sector who earn below R6 500.
  • Employment tax incentive reimbursements will be paid monthly to compliant employers (instead of twice a year)
  • Businesses with a turnover of less than R50 million will be allowed to delay 20% of the PAYE liabilities over the next four months (only if they are tax compliant).
  • Above businesses may also delay a portion of the provisional corporate income tax payments over the next six months (without penalties or interest). Again, only if they are currently tax compliant.

A possibility of temporary reduction of both employer and employee contributions to the Unemployment Insurance Fund and employer contributions to the Skills Development Fund is being investigated. More details to follow.


 

Essential Services Certificate

Should your business provide essential services and you wish to trade during the period of lockdown, you will need to obtain approval from the Department of Trade, Industry and Competition. To apply, you will need to go to the Companies and Intellectual Property Commission (CIPC) Bizportal website and obtain a certificate from the Commission which will allow you to continue trading.

The Bizportal website contains a menu icon listed as “Essential Service Businesses” through which an application can be made to the CIPC.

Visit www.bizportal.gov.za

SUBSCRIBE TO OUR BLOG!

Get amazing insights and news.