Can I claim UIF if I retire South Africa?

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UIF Act and Retirement: There are no benefits linked to age or retirement at all in the UIF Main Act that relates to the benefits payable. Unemployment benefits are strictly intended for employees who have involuntarily lost their employment.

There are the 5 pillars of benefits under which you can apply for benefits:

  • Unemployment benefits
  • Illness benefits
  • Maternity benefits
  • Adoption benefits
  • Dependants’ benefits

The purpose of UIF is to accommodate workers who have (involuntarily) lost their job or income due to retrenchment and dismissal, (illness or pregnancy, adoption and death).

A quick summary of when you can claim from the 1st pillar are the following:

  • Your contract of employment has been terminated;
  • Your fixed term contract has ended and not been renewed;
  • You’ve been dismissed (or fired) from your job, as defined by section 186 of the Labour Relations Act ’95;
  • You or your employer has been declared insolvent, in terms of the Insolvency Act, 1936;
  • Your contract of employment has been terminated by the death of your employer;

And you’re registered as a work-seeker with a Labour Centre And you are capable of and available for work.

At the end of each month, the employer is required to submit a declaration to the Department of Labour containing one of the following reasons and if an employee had left your employment one of the following (yellow) reason codes would be on the UI19

The following employment status codes are valid:
01: Active
02: Deceased (death benefits)
03: Retired
04: Dismissed
05: Contract ExpiredUIF Act and Retirement
06: Resigned
07: Constructively Dismissed
08: Employer’s Insolvency
09: Maternity / Adoption Leave
10: Illness Leave
11: Retrenched
12: Transfer to Another Branch
13: Absconded
14: Business Closed

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If the reason code is 03 – Retired – no unemployment benefits are available online. However, if the employee believes that they are entitled to benefits, the employee is asked to visit the office with a completed UI2.11, signed by the employer, on which they have declared whether the contract was terminated by the employer or the employee. If the employee has terminated the contract, or has agreed to the termination of contract, there are no benefits due, only if the employer has stated that there was an involuntary benefit.

There is confusion as to the reasons when the DOL see a reason ‘code 03’, and there have been discussions around whether it should say, voluntary retirement, i.e. no benefits due.

Below is an extract that makes it pretty clear what the intention of the act is:

Question:
If I decide to retire at 60 instead of 65 can I claim UIF?

Answer:
There is a difference between unemployed, and being retired. The purpose of UIF is to tie over workers who have (involuntarily) lost their job or income due to retrenchment, dismissal, illness or pregnancy. It is implied that these workers will attempt to get back into the job market. If you retire early, you do so voluntarily, with the assurance that you have a pension to support you. So early retirement does not entitle you to a UIF benefit, otherwise everyone would be doing it.

More Information on UIF

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