The Unemployment Insurance Fund (UIF) has announced a significant increase in the Temporary Employer-Employee Relief Scheme (TERS) budget, raising the allocation from R400 million to R2.4 billion. This decision aims to assist businesses facing financial distress and prevent further job losses in an economy still recovering from various setbacks, including the COVID-19 pandemic and ongoing global economic uncertainties.

The expanded budget reflects the South African government’s commitment to job preservation and the support of struggling industries. Given the recent job losses in key sectors such as mining, manufacturing, and telecommunications, the increased TERS allocation will offer relief to companies and help sustain employment levels.

Understanding the TERS Scheme

The Temporary Employer-Employee Relief Scheme (TERS) was introduced as an emergency financial intervention by the Department of Employment and Labour to support businesses and workers affected by economic disruptions. The scheme provides wage relief to distressed companies, allowing them to continue paying employees while implementing strategies for financial recovery.

Key features of TERS:

  • Provides salary assistance for up to 12 months for businesses in distress.
  • Helps employers retain workers instead of resorting to retrenchments.
  • Employers are only required to cover social costs (e.g., UIF, provident fund, and medical aid contributions).
  • Supports businesses in developing a turnaround strategy to ensure long-term sustainability.

Since its inception, TERS has played a crucial role in protecting jobs, particularly during the COVID-19 crisis, and has continued to assist businesses in various economic sectors struggling with financial instability.

Reasons for the Budget Increase

The decision to increase the TERS budget was driven by the ongoing economic challenges in South Africa, which have resulted in significant job losses across various industries. The Commission for Conciliation, Mediation and Arbitration (CCMA) reported that while 14,887 jobs were saved through intervention efforts in the 2023/2024 financial year, more than 22,500 employees still faced retrenchment.

Some of the biggest contributors to job losses include:

  • Mining sector5,153 retrenchments
  • Manufacturing sector2,125 retrenchments
  • Telecommunications sector1,680 retrenchments

Recognizing the urgent need for financial intervention, the Department of Employment and Labour reallocated funds to expand the TERS budget, ensuring that more businesses can access relief funding and avoid shutting down.

How TERS Supports Different Industries

Various industries have benefited from the TERS scheme since its introduction. The sectors that have seen the highest impact include:

1. Hospitality and Tourism

Hotels, lodges, restaurants, and travel agencies suffered massive losses due to decreased tourism. TERS funding has allowed many businesses in this sector to continue paying staff salaries, preventing job losses.

2. Manufacturing

With supply chain disruptions and declining demand for goods, manufacturing companies have faced financial constraints. TERS has helped factories retain their workforce by covering salary costs, allowing them to remain operational.

3. Retail

Non-essential retail businesses have struggled with reduced consumer spending, resulting in lower profits and financial strain. TERS has enabled retailers to maintain their workforce while adapting to new business models.

4. Transportation

Public transport services, logistics companies, and courier businesses have experienced operational slowdowns, affecting their ability to pay employees. The TERS scheme has provided much-needed financial relief to sustain jobs in this critical industry.

Impact of the TERS Scheme on Job Retention

The TERS program has saved thousands of jobs across various sectors by ensuring that companies in distress do not immediately resort to retrenchments. By providing salary support, the scheme enables businesses to stay afloat and recover financially without sacrificing their workforce.

According to government reports, the scheme has been a key factor in reducing unemployment rates by offering businesses a financial safety net during economic downturns.

Application Process for TERS

Businesses experiencing financial difficulties can apply for TERS funding through the CCMA (Commission for Conciliation, Mediation, and Arbitration).

Required Documents for Application

To qualify for TERS funding, employers must submit the following documents for evaluation:

  1. Audited Annual Financial Statements for the past two financial years.
  2. Independently Reviewed Financial Statements (for companies not legally required to be audited).
  3. Latest Management Accounts with comparative financial figures (if the latest statements are older than three months).
  4. Termination of Contract and Bank Statements (for individual applicants).
  5. A Business Case, detailing the reasons for financial distress and a turnaround strategy.

Where to Apply

TERS applications are processed through the CCMA, and no application, initiation, or administration fees are required. Employers are encouraged to apply as early as possible to receive timely assistance.

Challenges and Future Improvements

While TERS has been successful in saving jobs, there have been challenges in implementation, including:

  • Delays in fund disbursement due to high application volumes.
  • Fraudulent claims, leading to stricter verification processes.
  • Limited awareness among small businesses regarding eligibility and application procedures.

To improve the effectiveness of the TERS program, the Department of Employment and Labour is working to:

  • Speed up application processing and payouts to ensure businesses receive support faster.
  • Enhance fraud detection measures to protect funds from misuse.
  • Expand awareness campaigns to educate more businesses about their eligibility for relief.

Related: Understanding the PAYE and UIF Calculator: A 2025 Guide for South Africans

The increase in the TERS budget from R400 million to R2.4 billion is a critical intervention aimed at preventing job losses and supporting struggling businesses. With many industries facing financial distress, this expanded funding will help businesses retain employees, sustain operations, and recover from economic hardships.

By streamlining the TERS application process and ensuring that funds reach businesses efficiently, the government can further strengthen job security and promote economic stability. Employers are encouraged to apply for TERS assistance to safeguard their workforce and build a path toward long-term financial sustainability.

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