Do Learnerships Pay UIF? Understanding UIF Rights for Learners in South Africa

Do learnerships pay UIF in South Africa? Learn how UIF contributions work during learnerships, who qualifies, and know before applying.

As South Africa continues to tackle high unemployment, especially among youth, learnerships have become a vital stepping stone into the workforce. These structured work-based learning programmes are offered by employers in partnership with Sector Education and Training Authorities (SETAs). They allow learners to gain both theoretical knowledge and practical experience, while often receiving a monthly stipend.

But one question that arises frequently is: Do learnerships pay Unemployment Insurance Fund (UIF) contributions? The answer is more complex than a simple yes or no. In this article, we’ll explore UIF obligations for employers, the rights of learners under the UIF Act, and what learners can expect during and after their learnerships.

What Is the Unemployment Insurance Fund (UIF)?

The Unemployment Insurance Fund (UIF) is a social security system in South Africa that provides temporary relief to workers who become unemployed, maternity, or are unable to work due to illness or death of a breadwinner. It is governed by the Unemployment Insurance Act, 2001, and the Unemployment Insurance Contributions Act, 2002.

Employers and employees both contribute to the UIF at a rate of 1% each of the employee’s remuneration, bringing the total monthly UIF contribution to 2%.

What Is a Learnership?

A learnership is a work-based education and training programme that leads to a National Qualifications Framework (NQF) registered qualification. Learnerships are typically:

• Funded by a SETA
• Conducted over 12 to 24 months
• Include both classroom-based learning and on-the-job training
• Targeted at unemployed youth, graduates, or employed individuals seeking to upskill

Learnerships are legally governed by the Skills Development Act, and the terms are outlined in a formal Learnership Agreement signed between the learner, the employer, and the training provider.

UIF and Learnerships: Are Learners Covered?

The Short Answer:

Yes, in many cases learners are covered by UIF, but there are specific conditions that determine whether a learner is entitled to UIF contributions and claims.

Key Considerations:

1. Nature of the Learnership (Employed vs Unemployed Learners):
   • Employed learners (those already employed by the company and undergoing training):
     UIF contributions are mandatory.
   • Unemployed learners (new entrants sponsored by SETAs and receiving a stipend):
     UIF contributions may not be made, depending on how the stipend is structured.
2. Type of Compensation:
   • If a learner receives a stipend, and not a salary or wage, UIF contributions are often not made.
   • If a learner is paid as an employee, even temporarily, the employer must deduct UIF and pay it to SARS.
3. Terms of the Learnership Agreement:
   • The contract signed by the learner, employer, and training provider may specify UIF inclusion.

What Does the Law Say?

Unemployment Insurance Contributions Act, 2002

According to the UIF Contributions Act, an employer must contribute to UIF for any employee who works more than 24 hours per month, unless that person is specifically excluded.

Who Is Excluded?

The following categories are exempt from UIF:

• Independent contractors
• Learners who receive stipends but are not considered employees
• Workers in informal or unpaid volunteer roles

Who Is Included?

• Learners who are deemed employees in terms of the Basic Conditions of Employment Act
• Learners working more than 24 hours a month and receiving a salary or wage
• Learners whose contracts clearly define them as “employees”

This grey area means that UIF eligibility depends on how the learnership is contractually and operationally structured.

Real-World Example: A Learner on a Stipend

Let’s say Sipho, a 23-year-old, joins a SETA-funded learnership in Business Administration. He is not previously employed and receives a stipend of R3,500 per month during the 12-month programme. He does not receive traditional employment benefits like leave pay, pension, or UIF.

In this case, because:

• He is not a formal employee, and
• The stipend is not considered a salary or wage

UIF contributions are typically not deducted, and Sipho won’t be able to claim UIF after the learnership ends.

Real-World Example: A Learner Who Is Employed

Now imagine Thuli, who is working at a retail company and is sent on a 6-month learnership as part of her upskilling. She remains an employee, continues receiving her salary, and is on the employer’s payroll.

In this case:

• She is an existing employee,
• UIF contributions are already in place, and
• Her employment contract remains active during the learnership.

Therefore, she is fully covered by UIF, and can claim if she becomes unemployed after the learnership.

What Happens After the Learnership Ends?

If you were:

• Contributing to UIF during the learnership → You may be eligible to claim UIF if you become unemployed afterward.
• Not contributing to UIF → You won’t be able to claim UIF benefits.

Important:

To claim UIF, you must have made at least 13 weeks of contributions in the past 4 years, and you must have been unemployed involuntarily (i.e., not due to resignation or dismissal for misconduct).

Can Learners Claim UIF?

Eligible Learners Can Claim UIF If:

• They were formally employed and contributing to UIF during the learnership
• Their employment ended due to retrenchment or the natural end of the contract
• They have a valid UIF reference number from previous contributions

Ineligible Learners Cannot Claim UIF If:

• They were receiving a SETA stipend
• They were never classified as employees
• They didn’t meet the minimum contribution requirement

UIF for Learnership Providers and Employers

Employers hosting learnerships need to be aware of their UIF responsibilities. Failure to contribute when legally required may result in:

• Penalties or interest from SARS
• Legal liability if the learner tries to claim and is denied
• Non-compliance with labour and tax regulations

It is advised that employers:

• Clarify learner classification in the contract (stipend vs salary)
• Register employees for UIF through the SARS eFiling or uFiling systems
• Deduct UIF at the correct rate (1%) and match it with their own 1% contribution

SETAs and UIF: What Do They Say?

Most SETAs do not contribute UIF on behalf of learners receiving stipends. Their role is to fund the training and stipend, while the employer (if any) is responsible for employment-related deductions.

This reinforces the importance of understanding your learner classification before assuming UIF benefits.

Know Your Rights: What Learners Should Do

1. Ask Questions Before Signing

When you’re offered a learnership, ask:

• Will I be considered an employee?
• Will UIF contributions be deducted?
• Will I be covered for unemployment benefits?

2. Request a Copy of Your Learnership Agreement

Make sure the agreement clearly defines:

• Payment terms
• Employment status
• Any deductions or benefits

3. Register for UIF if Eligible

If you’re contributing, you can register on the uFiling platform to track your contributions.

Frequently Asked Questions

1. Can I pay UIF myself if I’m on a stipend?
No. Only employers can register and make UIF contributions for employees. UIF does not accept voluntary contributions from non-employees.

2. I didn’t contribute to UIF during my learnership. Can I claim now?
Unfortunately, no. You can only claim UIF if you were contributing through formal employment.

3. My learnership ends soon. What can I do to secure income?
Consider applying for:

• Internships
• Full-time employment
• Another learnership or short course
• EPWP or SETA-funded initiatives

4. Is UIF deducted from all learnerships?
No. Only if you are classified as an employee receiving a salary or wage.

Final Thoughts

Whether UIF applies to your learnership depends largely on how your learnership is structured. If you’re receiving a stipend funded by a SETA, you may not be contributing to UIF, and therefore won’t be eligible for unemployment benefits afterward. However, if you’re already employed or receive a wage during your learnership, you are likely covered by UIF.

To avoid confusion, always ask for clarity before signing your learnership agreement. Understanding your rights and responsibilities will help you better plan your career and financial future.