South African Institute of Professional Accountants
2 April 2014
Important changes to the Compensation Act
The Compensation for Occupational Injuries and Diseases Act has some important changes which are coming into effect on 1 April 2014. However, the deadline for the 2013 Return of Earnings submission to the Compensation Fund has been extended from 30 March to 31 May 2014.
According to Faith Ngwenya, Technical and Standards Executive at the South African Institute of Professional Accounts (SAIPA), missing this deadline is a bad idea: “In order to obtain a letter of good standing, an organisation must be up to date with the submission of returns as well as payment of outstanding assessments.”
However, the good news is that Returns of Earnings submissions may be filed electronically once financial officers have registered on the Department of Labour (DoL) website. (Employers may register online to complete their 2013/14 submissions.)
“Although if you prefer, these may still be mailed or delivered to the Compensation Fund offices in Pretoria or at the various Labour Centres around the country,” says Ngwenya.
Changes in brief
The changes in the Act have resulted in an increase of the maximum earnings to R332 479 with effect from 1 April 2014. There has also been a 6.4% increase in monthly pensions payable in terms the Act for accidents that occurred before 1 April 2013 and occupational diseases diagnosed before 1 April 2013. This will also take effect from 1 April 2014.
What to remember when submitting Return of Earnings
Whether you’re completing a Return of Earnings submission online or in hard copy, here is a list of important information that must be included (Source: DoL website):
·Updated contact details of employer (physical and postal addresses, telephone numbers, nature of business; etc.)
· Number of employees employed for the assessment period (1 March to end of February)
· Earnings (salaries and wages) of every employee up to the maximum amount for the assessment period (1 March to end of February) – now R332 479
·Nature of business of employer
“It is the responsibility of the employer to ensure that all the information provided to the Compensation Fund is accurate and complete,” reminds Ngwenya. However, if the return of earnings is completed by an agent or a payroll administrator, it is compulsory for both employer and the agent/payroll administrator to sign the declaration.
“Also, it is a serious offence to make false declarations or fail to render a return by the deadline,” says Ngwenya. The Act requires that all return of earnings forms must be submitted by 31 March each year; but due to the changes in the Act, the deadline this year is end May. “However do not wait to file your return on the last day as Murphy’s Law has it that’s when systems will fail you,” warns Ngwenya.
Finally, it is the responsibility of the employer to ensure that they are issued with the return of earnings and submit by the closing date. The forms are usually issued by end January each year.
“It is also important to note that financial statements or any additional information may be requested for further clarity,” concludes Ngwenya. “So keep those statements handy!”