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UIF CONTRIBUTION CEILING INCREASE AND PENSION FUND WITHDRAWAL INCREASE

UIF Contribution Ceiling Increase And Pension Fund Withdrawal Increase

Recently, changes have been made to the regulations regarding the capped amounts of contributions to be made to the UIF on the one hand and withdrawals from retirement funds on the other hand. This move is an attempt to bolster the suffering UIF coffers and, secondly, to assist households with greater access to much-needed funds in the challenging economic climate that is blowing across South Africa’s economy. 

As of the 1st of June 2021, Government has increased the ceiling for UIF contributions from R14 872 to R17 712 a month. This means that the UIF contribution is calculated using the maximum earnings ceiling amount for employees who earn more than this per month. Thus, the maximum contribution deducted for employees who earn more than R17 712 a month is R177,12 per month.  

This is essentially a tax increase. The Treasury said it would “… provide additional funds to the UIF after a large portion of the available funds have been used for the Temporary Employment Relief Scheme”. 

On the pension fund front, members with fully paid annuities may now withdraw an increased amount from their retirement funds. Paid-up members may now withdraw R15 000 from their retirement savings, an increase from the previous cap of R7 000. 

In this regard, the Treasury stated that “The change to the withdrawal threshold is intended to assist households in accessing funds”. 

Such a withdrawal can keep a currently suffering household on its feet. However, one must remember that such a withdrawal from one’s nest egg must be repaid as soon as circumstances allow, as you are essentially borrowing from your future self who may consequently go without. 

The purpose of this Act is, among other things, “to create offences which have a bearing on cybercrime; to criminalise the disclosure of data messages which are harmful …” and creates mechanisms and procedures for determining and prosecuting the criminalised activities enumerated therein. 

Under this Act, it is now an offence to disclose harmful data messages and malicious communications, such as those which incite damage to property or violence; which threaten persons with damage to property or violence; or images of an intimate nature disclosed without the subject’s consent.  

It is also an offence to unlawfully intercept data, including the “examination or inspection of the contents of the data” when one is not the lawful owner or holder. Other offences now criminalised by the Act include fraud, forgery and extortion of a cyber nature. 

A person who contravenes certain provisions of the Act may face a fine or imprisonment of up to 15 years or both. 

Another interesting provision is that electronic communications service providers (such as Vodacom, WhatsApp, Facebook, Twitter and Instagram) who become aware of offences listed in the Act must, within 72 hours, report the offence to the South African Police Services and further preserve the information relating to the offence to assist the Police. 

With data being defined in the Act as “electronic representations of information in any form”, this piece of legislation goes a long way to protect and enforce data security. However, it also places every person with virtually any form of access to electronic communications or data storage devices in a position of great responsibility, as the provisions are stringent and the consequences of violation thereof are severe.

If you have any questions about other Labour or Land issues, contact McCarthy & Associates Attorneys  on (033) 266 6170 or admin@maalaw.co.za. 

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