All the financial help available to South Africans during the corona crisis
- There is now a range of measures available to help South African businesses – and individuals – amid a crippling corona-induced economic crisis.
- Government, banks, and insurers all have interventions to help cushion the economic blow of Covid-19.
- Most of the support is aimed at small businesses, and their employees.
- Here is where you can find help and money during the coronavirus lockdown and beyond.
There is now a range of measures - from government, banks, and insurers - available to South African businesses and individuals amid a crippling corona-induced economic crisis.
From loans to tax breaks, most interventions are aimed at getting small businesses in particular through the next couple of months. More measures are expected to help individuals, the self-employed and the informal sector.
Here’s where you can find help, and money, to get through the coronavirus disaster.
Companies can claim back up to R1 500 a month per employee who earns less than R6 500 (for those younger than 30), and R500 for those 30 and older. These amounts will be paid back every month by SARS as part of the Employment Tax Incentive (ETI) programme.
Delay in payment of provisional tax:
Instead of paying 50% of their expected tax bill six months into the tax year, and then settling the full amount at the end of the tax year, companies are now allowed to pay only 15% after six months, and another 50% by the end of the tax year. Then, by 30 September 2021 (or six months after the end of its financial year), the company needs to pay the outstanding balance. (This option is only for companies with an annual turnover of less than R50 million.).
Delayed employee tax payments:
Businesses with an annual turnover of less that R50 million can also keep back 20% of the pay-as-you-earn (PAYE) payments they were supposed to hand over to the SA Revenue Service (SARS) for the next four months. But they will have to pay back this amount in equal instalments, with the first payment expected on 7 September 2020.
UIF payouts: The Covid-19 Temporary Relief Benefit
Payouts of up to R6 700 per month: This is what workers in struggling firms could get from govt
- Employers whose businesses have been crippled by the coronavirus crisis can apply for funding to help cover worker salaries.
- The biggest payout may be up to R6 732 a month (for those earning more than R17 702), and the minimum will be in line with the minimum wage.
- But each company will first have to prove how badly the crisis hit them, before payments will be considered.
There are two main government schemes aimed at small businesses.
The Debt Relief Finance Scheme will assist distressed small companies with funding.
Business Growth/Resilience Facility aimed at small companies which can take advantage of supply opportunities resulting from the corona virus pandemic or a shortage of goods in the local market.
For both of these, companies first need to register at https://smmesa.gov.za/. (Money will be paid out within seven business days after an application has been approved, the department of small business development promised.)
Government will will also review and assist with the restructuring of SETA funded SMMEs. A payment moratorium/payment holiday will be given to SEFA funded SMMEs that are negatively impacted by the COVID 9 pandemic after the analysis has been done by them to assess which clients require restructuring of loan accounts.
The Oppenheimer family’s R1 billion:
The money made available by the Oppenheimer family will be paid out directly to employees of small, medium and micro-sized businesses as interest-free loans. Employees themselves will not be liable to pay the money back, but companies will be. The typical loan amount per employee is expected to be around R750/week, for a period of 15 weeks. Currently, the money is available to clients of Absa, First National Bank, Nedbank, and Standard Bank, and limited to businesses which were “financially sustainable” before the coronavirus crisis. Businesses will be able to apply directly with their banks from Friday, April 3. The South African Future Trust (SAFT)
Johann Rupert’s R1 billion:
TEMPORARY CLOSED - OVER SUBSCRIBED
The Rupert family’s donation will be distributed as loans through Business Partners, a funder of small companies. Business Partners says applicants for finance will be able to apply via www.businesspartners.co.za – but applications are not yet open.
Help for different sectors:
Business Relief Fund
The Department of Tourism has made an additional R200 million available to assist SMMEs in the tourism and hospitality sector who are under stress due to the new travel restriction.
Tourism Business Relief Centre
This is administered and managed by the National small business chamber to assist by providing non-financial support to small business impacted by COVID-19
National Empowerment Fund-DTC
This fund is administered by The National Empowerment fund for black business to purchase machinery, raw materials and other items.
The Industrial Development Corporation (IDC) has allocated billions in emergency funding to help manufacturers with working capital, as well as for companies in agriculture, tourism, energy, and vehicle components manufacturing.
The National Film and Video Foundation (NFVF) has invited the industry to submit funding applications for script development, animation, and post-production projects. The call for these applications was supposed to have opened in August, but this has been hastened “to keep the industry busy during this downtime”. The NFVF will also provide a once-off cash injection of R500 000 to the ten companies currently commissioned by the organisation.
Minibus taxi owners:
SA Taxi, which finances more than 32 000 minibus taxis, has announced a repayment holiday of a month (from April 1) for its clients.
The insurance company has allocated money (part of R102 million in total) to some of its service providers, such as panel beaters and plumbers. Companies need to have a turnover of less than R50 million per year, and the rand value of work allocated by OUTsurance must drop by more than 50% during the period April to June 2020. Other requirements also apply.
Government's new support scheme for spaza shops will give them funding to buy stock and assure bulk-buying discounts at approved wholesalers. But the spaza shops need to be registered with the SARS, the Unemployment Insurance Fund, and the Companies and Intellectual Property Commission (CIPC).
For the self-employed
Delay in payment of provisional tax:
Instead of paying 50% of their expected tax bill after six months into the tax year, and settling the full amount at the end of the tax year, provisional taxpayers only have to pay 15% after six months, and another 50% by the end of the tax year. Then, by 30 September 2021, they need to pay the balance. While it hasn’t finalised which individuals would be eligible, Treasury says that it will probably be those who have a turnover of less than R5 million and don’t earn more than 10% of their turnover from interest, dividends, foreign dividends, rentals from letting fixed property and pay received from an employer.
South Africa's big banks have announced individual measures to assist clients, with some offering three-month payment holidays on home loans, vehicle finance, personal loans, and credit cards. It is also important that everyone consult with their banks regarding the option. Credit Insurance may also assist for a period of twelve months and enquiries must be made with banks if such cover is in place.
Momentum short-insurance clients: Clients can get cash back (to a total amount of R26 million) early from their no-claims and safety bonuses.
MiWay clients: Clients will automatically get an average 10% reduction in their car insurance premiums during the month of April.
OUTsurance clients: For clients who miss a premium and are within six months of their OUTbonus payment, the bonus will be available for use in lieu of the premiums. Clients can also contact the insure to temporarily reduce their cover, without impacting the terms of their cover. For an example, a customer who has a comprehensively insured vehicle, which is not financed, may want to temporarily reduce cover to third party fire and theft. Although natural perils (flood, fire, hail etc) is not generally covered under third party fire and theft during this period OUTsurance will include this cover. Excess payments for those clients who do have a claim between April and June 2020 will also be reduced.