The purpose of the Unemployment Insurance Fund (UIF) is to provide financial relief to employees who have involuntarily lost their employment or income due to retrenchment or dismissal (illness, pregnancy, adoption or death).
Considering the high unemployment rate and economic climate in South Africa, many retirees would prefer to continue working mainly due to financial reasons and because they have not saved sufficiently for their retirement during the course of their lifetime.
It is important for these employees to remember to register for UIF benefits when they reach the retirement age of their company.
Many employees are under the impression that UI benefits are for workers who have been retrenched or can no longer work due to illness, which is not the case.
The process for claiming benefits after retirement is as follows:
- Request and complete the UI19 form from the employer
- Employer must sign and stamp the UI19
- Employee must register as a job seeker with the Department of Labour
- Benefits must be claimed as soon as possible after becoming unemployed
An employee does not qualify for unemployment benefits when they retire early, just as with voluntary retrenchment, due to the fact that they still have an option to work, but choose not to. Benefits for retirement will only be approved if an employee reaches the company retirement age and if he or she would prefer to still be working, but cannot.
The employer will most probably complete the UI19 document using the “Code 3 – Retirement”. In this case confusion will arise with the Department of Labour as they will see it as “voluntary retirement”. In this instance the employee should visit the nearest UIF office and submit a UI2.11 form, signed by the employer. Herein the employer will declare that the employment was terminated by the employer and not as a result of choice exercised by the employee.
ABOUT THE AUTHOR
Nidene Lourens obtained her B.Com Law (2006), B.Com Honours in Business Management (2008) and LL.B (2010) from the University of the Free State. She is currently the SEESA UIF & COID Manager at our Pretoria Office.