Simphiwe Mofokeng, Senior Healthcare Consultant at Chartered Employee Benefits, shares a summary of vaccination policies developments.

Developments in Regulations for Mandatory Vaccination Policies for Businesses

Following President Cyril Ramaphosa’s state of the nation address, we have seen further easing of restrictions. It would seem that the end of the national state of disaster is near; however, the pandemic is not over, and there is an ongoing need to prevent and mitigate the risks associated with SARS-CoV-2 exposure in the workplace. The necessity remains to incorporate the provisions in the Regulations and the Direction relevant to preventing and mitigating the risks.

The Department of Employment and Labour, in consultation with NEDLAC, has issued a Code of Good Practice, which was recently published by the government intended to take effect on the date of the lapsing of the Declaration of a National State of Disaster, as the direction on ‘Occupational Health and Safety Measures in Certain Workplaces Regulations’, will cease to have legal effect.

The purpose of this Code is to guide employers and employees in managing exposure to SARS-CoV-2 in the workplace and requires any person interpreting an employment law to take this Code into account.

The code also requires that every employer must take measures to determine the vaccination status of their workers and empowers the employer to require their employees “to produce a vaccination certificate”.

The Code of Good Practice is stricter when compared to the previous Consolidated Covid 19 direction on Health and Safety in the Workplace.

The direction allowed employees the right to refuse to be vaccinated based on constitutional or medical grounds, whereas the Code of Good Practice requires the employer to make reasonable accommodation for an employee’s refusal where the employee produces a medical certificate attesting to the employee having contra-indications for vaccination – and the employer accepts such medical assessment, or has the assessment confirmed at its own expense.

To read more, click on https://www.gov.za/documents/disaster-management-act-code-practice-managing-exposure-sars-cov-2-workplace-15-mar-2022

Updates on COVID Booster Shots

It is still unknown how long protection from COVID-19 vaccines lasts, but current data indicates that most people have strong protection against serious illness and death for at least six months. However, there is increasing evidence that the effectiveness of the COVID-19 vaccine against infection and mild symptoms can wane over time.

Based on data provided to the World Health Organisation (WHO) by the manufacturer of the Pfizer-BioNTech vaccine, it has been shown to be 95% effective in an ongoing large-scale clinical trial. The manufacturer of the Johnson & Johnson vaccine has shown it to be 66.9% effective in an ongoing large-scale clinical trial.

With over 33 million vaccine doses administered for COVID-19 in South Africa to date, part of which is made up of over 43% of the adult population who have been fully vaccinated, the country still has not reached the herd immunity target of 67% through vaccinations.

As of From February 2022, the COVID-19 booster shot was made available to South Africans over the age of 18 years who are fully vaccinated. They must have had either one dose of Johnson & Johnson, or two doses of the Pfizer-BionNTech vaccine.

The timing for the administration of booster doses for immunocompromised individuals differs from the below:

Johnson & Johnson
From Monday 14 March 2022, you may have your first booster dose 60 days after your primary vaccination with J&J. Then, you are eligible to receive an additional booster of either J&J or Pfizer 90 days after the first booster.

Pfizer – BioNTech
For the Pfizer vaccine, you are eligible for the first booster dose 90 days after your second scheduled vaccine dose. You may have either the J&J or Pfizer booster.

To date, just under 2 million booster vaccines have been administered.

To keep up to date with the developments on COVID vaccinations, you can access the following link: https://vaccination.sacoronavirus.co.za/support/home

I delivered a retirement benefits presentation to the staff members of a new client, who had recently concluded an agreement to commence a retirement savings plan and insured risk-benefit scheme for their employees. We suggested that we meet with the staff to assess the level of interest in this new offering. The staff participated enthusiastically, with some questioning the necessity of the new arrangement, while others were intrigued about how the benefits worked and whether they added value to them. Some questions were more complex, relating to the selection of investment managers, investment costs and performance of the recommended investment strategy.

Let’s understand the role of a retirement/employee benefit consultant

Benefits consulting is more than negotiating with insurance companies, presenting renewals, and tweaking cost-sharing. From an employer’s perspective, it’s essential to work with a flexible provider to cater to the needs that are unique to your company. Suppose you contract with an appropriate consulting company; in that case, you’ll have an employee benefits strategy that is compelling for recruiting and retaining employees, maximises employee health and wellbeing, and is aligned with your financial objectives.

No company hires only once a year; therefore, depending on your current solution, you might need more flexible options that provide room for your business to grow and ensure that new employees are not forgotten. It’s essential to find a solution that includes year-round support for employees for questions, comments, and concerns; your appointed consulting services company will also be able to provide this service in several languages.

An accomplished employee benefits consulting company should, at a minimum, perform the following services/functions:

• Retirement plan selection: If a company plans to offer a retirement plan to its employees for the first time, retirement benefit consultants should perform member presentations explaining the proposed fund structure and benefits.
• Plan changes: Retirement benefit consultants can also offer guidance on making changes to an existing retirement plan or changing to a new type of plan altogether.
• Investment oversight: Retirement benefit consulting services can include managing the plan’s investments, preferably with an independent investment consultant, ensuring they align with the member’s and employer’s objectives and goals.
• Plan documentation: A retirement plan consultant can help with creating key documents related to the plan, including an investment policy statement. This document outlines the goals and objectives of the plan and the steps the plan manager will take to achieve them.
• Plan participant/member education: Retirement benefit consultants can take responsibility for educating employees about the plan benefits and how to participate; this should be ongoing and is particularly useful when new employees join the company.
• Governance and compliance: Advise members and employers on the laws and regulations governing certain benefits.
• Communication: Assist the employer with written member communication and presentations should a transfer to another fund be required and all other requirements such as notification of termination to current service providers.
• Administration: Assist the employer with administrative duties, including medical underwriting requirements, claims etc.
• Member queries: Attend to general member queries and product-related queries.
• Management Committee: Assist the employer with the nomination and election of member representatives to the employer/member representative (management) committee. While these committees are not a legal requirement, they form an essential support and communication function for the employer, members of the fund, and the fund itself.
• Meetings: Arrange a management meeting (at least one per annum) to discuss fund matters and perform secretarial functions (recording of minutes).

The importance of independent advice

An independent benefits consultant can present clients with potential solutions of what they believe will best suit the client’s needs without being restricted to a specific provider/s. This means independent consultants have a wide array of service providers and products at their disposal, which can be considered in the advice process.

The key difference between independent consultants and tied agents is that tied agents can only offer you products offered by the company that employs them. The tied agent will be limited to formulating their advice using this specific product suite.

On 30 December 2021, the government confirmed that the curfew would be lifted, ‘there will therefore be no restrictions on the hours of movement of people’. It was certainly a treat to hear the countdown, clinking of champagne glasses and usher in the new year with family and friends. I must admit being out after 12 pm felt a bit strange. Let me use this opportunity to wish you a prosperous year ahead on behalf of the Chartered team.

Humans are intricate; the inherent ability to adapt and readapt is truly remarkable. Granted, we vary in how easily we navigate change, but if the last two years is anything go by, it stands as a testament to our resilience.

New Year’s Resolutions

On the topic of adapting, as is customary of a new year, most of us would have some resolutions put in place, both personally and professionally.

Resolution: /ˌrezəˈluːʃn/ [countable] a definite decision to do or not to do something.

I was at dinner with a dear friend, naturally, the topic came up, and she said to me, ‘how about setting aspirations instead of resolutions?’ What a mind shift, to aspire to something as opposed to setting hard and fast change that is meant to kick in as of 1 January. Let’s not go down the rabbit hole here, and start discussing our past ditched resolutions, which I am sure we will all have a story to share.

Aspiration: /aspəˈreɪʃ(ə)n/ a hope or ambition of achieving something.

In the spirit of being kinder to yourself, which is a well-deserved gift to yourself, given the mental impact of the pandemic, we did some research on how one could better achieve the intentions set out in the practice of resolution-making.

Suppose resolution making is the disciplinarian and aspirations is the more lenient counterpart, both seeking to achieve the same outcome, an improvement in your life, personal or professional. What would be the ‘glue’ that makes this outcome stick?

New Year, New Habits

Your life today is essentially the sum of your habits. How in shape or out of shape you are? A result of your habits. How happy or unhappy you are? A result of your habits. How successful or unsuccessful you are? A result of your habits.

What you repeatedly do (i.e. what you spend time thinking about and doing each day) ultimately forms the person you are, the things you believe, and the personality that you portray.

Habit: /ˈhabɪt/ a settled or regular tendency or practice, especially one that is hard to give up

But what if you want to improve? What if you want to form new habits? How would you go about it?

It turns out there’s a helpful framework that can make it easier to stick to new habits so that you can improve your health, your work, and your life in general.

Click here to read Atomic Habits author James Clear’s article about how to form new habits that actually stick.

Looking ahead

Whichever route you choose, resolutions, aspirations, habits; keep an optimistic outlook. We are excited for prospects that the year ahead holds and look forward to engaging with our stakeholders.

Pension, provident and retirement annuity funds are some of the most tax-efficient ways to save for your retirement. Contributions up to 27.5% of taxable salary are tax-deductible, investment income is not taxed, and currently, the first R500 000 of a lump sum withdrawal on Retirement, death and retrenchment is tax-free.

The commonly accepted advice is that to achieve a retirement outcome of a 75% income replacement ratio, a person should contribute 15% to retirement and achieve a net investment return of 5% to 6% above inflation over their entire working career of approximately forty years.

The key here is “over their entire working career”. The reality is that many people change jobs and do not preserve their benefit on exit, leading to a reduced retirement outcome.

If a fund member has only twenty years fund membership before they retire, the pension fund will not likely provide a 75% income replacement ratio, as it only covers twenty years of a forty-year career. It is not the responsibility of the employer or pension fund to make up for this shortfall.

The second challenge is the investment portfolio that the fund member is in. Suppose fund members have an option to select their investment portfolio from a range of options, in that case, they can choose a portfolio or combination of portfolios, which best suits their needs and risk appetite. Where a person selects too conservative an option, this will also result in a reduced outcome.

If the pension fund is the member’s sole income stream at retirement, this becomes even more important, and members need to supplement their retirement savings.
Many fund members contribute additional voluntary monthly contribution amounts to improve their retirement outcome. This is very tax-efficient for them as these additional contributions are tax-deductible within the total of 27.5% allowed by SARS.

There is only one person that will determine your retirement outcome. That person is you.

Retirement V Risk Provision

A compounding factor is to balance the need between retirement and risk-benefit provision. This has become very relevant in the new normal of Covid 19 and the Coronavirus pandemic and the impact that it is having on the costs of risk benefits. Whether these costs will escalate remains to be seen, while the majority of the population remains unvaccinated.

If you are a member of an inclusively costed fund, the retirement component changes if the administration and the risk-benefit costs increase. The retirement risk is thus on the fund members.

Some funds offer members a choice of the level of death benefits, such as 1x, 2x or 3x annual salary. This allows fund members to select the cover that suits their needs. In an inclusively costed fund, a lower death benefit results in a higher retirement component.

Any additional risk benefits added to the fund will reduce the retirement funding component unless there is an increase in the employer and/or member contribution to compensate for this.

There is a fixed retirement contribution in an exclusively costed fund, and the employer pays the administration and risk-benefit costs over and above this. If these increase, the employer pays the higher amount, and it does not affect the retirement savings component. Thus, the structure and provision of risk benefits depend on affordability and what the employer is prepared to pay towards the fund.

Risk Benefits Provision: Individual Needs V Group Risk Benefits

So, what additional risk benefits should a company provide via its pension fund for its employees? This is subjective, depending on who is being asked.

A benefit becoming more widely provided for by some pension funds is critical illness cover. Insurers have different terminologies to refer to this benefit, and it is referred to as critical illness/trauma / dread disease benefits. This provides cover in the event that a member is diagnosed with a critical illness, as defined in the policy. It pays out a lump sum benefit as a multiple of the member’s salary and can be in addition to, or an accelerated payment of part of the existing death benefit.

Members and employers are questioning whether a benefit such as this should be provided via a pension fund or if this should be a member choice benefit in their personal capacity.

In conclusion, there is a delicate balance as to what is a realistic benefit structure and retirement outcome as to what is affordable. Employers should regularly assess the benefit structure to see if the benefits offered are relevant and cost-effective. Fund members need to critically assess their benefits and needs and make additional provision where necessary.

At the time of writing this, it is hard to believe we have 68 days left of 2021. On the other side of the third wave of Covid 19, I reflect on the scholars of our country who, for the last two years, have adapted to a combination of online and classroom education, limited social interaction opportunities and for the sport-loving children virtually no opportunity to display their talents.

The social unrest and looting, which occurred predominantly in Kwa Zulu and Gauteng, resulted in substantial damage to many businesses, the economy and the personal loss of possessions for many individuals and families.

In October, the country moved to adjusted alert level one, and we have approximately twenty million South Africans who have been vaccinated either partially or fully. Permission has been granted for 12 – 17-year-olds to be vaccinated. South Africa was removed from United Kingdom’s red list, making travel to and from the United Kingdom much easier for vaccinated travellers. These developments have lifted the country’s mood as residents can plan end of year travel and holidays, and families can re-connect over the festive season after many months of separation and isolation.

The year thus far has jolted the psyche of many South Africans. Yet, despite all these challenges and heartache, the proud people of this nation remain resilient, positive, and committed to the success of South Africa.

Over the last quarter, we have seen the following proposed legislation released for comment, which was undoubtedly influenced by the financial impact of Covid on many households.

Green paper on comprehensive social security reform

On 18 August 2021, the Minister of social development released a green paper on comprehensive social security and retirement fund reform, which was very similar to the National Social Security Fund paper of 2012.

In brief, the objective was to create a centralised “National Social Security Fund” (NSSF) intended to provide basic benefits, such as pensions, disability and survivor benefits for all qualifying citizens, up to a certain threshold. The government would manage the Fund, and employers/employees were initially expected to contribute between 8 and 12% of qualifying earnings. In addition, employees could choose to top up their existing retirement savings using their current occupational or individual arrangements.

This meant most employees would only be able to contribute to the “NSSF”, thereby putting their existing private funds at risk. After a huge public outcry, the paper was withdrawn on 1 September for further consultation and consideration.

Two bucket system/Dual access system

National Treasury is considering proposing a “two bucket system” for retirement; the proposal, aimed to be effective by 2022, will allow for pre-retirement withdrawals from a retirement fund while ensuring preservation of savings.

This has come about after growing calls from members to access part of their retirement savings due to exceptional circumstances, like the financial impact of Covid 19 on many employees.

The proposal is considering allowing employees to access a maximum of 30% or R30 000 of retirement savings while employed. Treasury is considering allowing fund withdrawals under very specific circumstances. The proposed two bucket system will enable “bucket one” to be preserved until retirement. The second bucket will allow pre-retirement access to retirement funds during emergencies or extraordinary circumstances.
The proposed trade-off for allowing early access is compulsory preservation, with “Bucket one” not being accessible before retirement.

Business, labour and government are currently locked in discussions to finalise this legislation, thereby replacing the current legislation, which prohibits pre-retirement access to retirement savings unless the employee resigns or is retrenched.

The industry awaits further announcements in this regard.

Changes to unapproved Policies

The definition of beneficiary was recently amended in the Long Term Insurance Act, which has impacted the payment of Death and Funeral benefits. As a result, an employer may no longer determine the beneficiary, and benefits cannot be paid directly to the employer, despite the policies being employer-owned policies.

This means that an insurer may not accept an employer/committee resolution instructing them who to pay, nor may an employer advance a payment and ask the insurer to reimburse them.

Where no beneficiary has been specified on the beneficiary nomination form or where no beneficiary nomination form has been completed, the insurer will pay the Death Benefit and/or the Funeral Benefit to the insured person’s estate.

It is, therefore, critical that each member completes a beneficiary nomination form and that this is kept up to date and on record with the employer. The change will come into effect from 1 December.

Stay Safe

As the year draws rapidly to a close, may I urge you all to remain vigilant and careful so a possible fourth wave does not spoil the current buoyant mood.

Our World in Data statistics reflects that over 7.7 million of the 60.14 million people in South Africa have been fully vaccinated. This makes up only 13,2% of the population, and over 11.2 million have received at least one dose to date. Considering this and the fact that all adult persons over the age of 18 currently qualify for the COVID-19 vaccine, it cannot be denied that vaccine hesitancy is a challenge that our country faces.

What the surveys found

A survey conducted by National Income Dynamics – Coronavirus Rapid Mobile (NIDS CRAM) in July from a sample of about 5 000 respondents indicated that vaccine acceptance had risen from 71% to 76% compared to surveys conducted earlier this year. University of Johannesburg’s (UJ) Centre of Social Justice collaborated with the Human Sciences Research Council (HSRC), and their survey looked at vaccine acceptance and hesitancy in SA. The overall vaccine acceptance rate was 72%, an increase from 67% on their previous survey in late December 2020.

The Afrobarometer survey run by the Institute of Justice and Reconciliation, on the other hand, found that vaccine acceptance was far lower than the figures reported by NIDS or UJ/HSRC, with 43% of respondents indicating they were either very likely or somewhat likely to get the vaccine, 12% of the people were somewhat unlikely to get it, and 42% were very unlikely to get the vaccine. This survey only had 1600 respondents who were carefully selected as a representative of SA’s geographic, age and gender distribution.

Incentivising Vaccines

The Health Department said the government is exploring different ways of ramping up its vaccination drive. Some of the identified problems are access to transportation and basic information on how one can get the vaccine, and scepticism about the side effects being underreported. The Western Cape has been running various campaigns to address vaccine hesitancy with various initiatives, including communication campaigns sharing information on COVID-19 and the vaccines.

President Cyril Ramaphosa announced two weeks ago his intention to introduce a “vaccine passport”. The “passport” is one of the tools currently used in other countries to encourage vaccine uptake; in its simplest form, it would be used as a method to verify the vaccine status of an individual.

Retails companies such as Game are introducing incentives in the form of discounts on purchases for the vaccinated persons.

Mandatory vaccinations in the workplace

We have witnessed private companies such as Discovery, which has led the pack in announcing the introduction of mandatory vaccinations for their employees.
The Employment and Labour Department issued a directive in June 2021 with key principles of the guidelines on the workplace. This is contained in the new consolidated direction on occupational health and safety measures in certain workplaces, which was gazetted by the Minister of Employment and Labour, Thulas Nxesi.

When formulating a vaccination policy, employers must consider constitutional grounds, such as the right to bodily integrity, the right to freedom of religion, belief, and opinion; as well as medical grounds – issues of an immediate allergic reaction of any severity to a previous dose or a known (diagnosed) allergy to a component of the COVID-19 vaccine.

The Consolidated OHS Direction requires an employer to include in its risk assessment whether it intends to make vaccinations compulsory, a three-step enquiry:

1. A risk assessment to be conducted, considering the operational requirements of the workplace.
2. If the employer decides to make it mandatory, once the risk assessment has been conducted, the employer must identify those employees whose work poses a risk of transmission or a risk of severe COVID-19 disease or death due to their age or comorbidities.
3. It must then amend its plan to include the measures to implement the vaccination of those employees as and when COVID-19 vaccines become available in respect of those employees.

We will certainly witness more collaborations between the public and private healthcare industry sectors, hopefully resulting in innovative solutions that will encourage South Africans to vaccinate. Importantly, the key to making an informed decision is the sharing of verified information that is easily accessible and transparent.

Amidst the current era of uncertainty, where people face challenges of many kinds, financial and otherwise, the Government is proposing lifelines to keep their citizens afloat. Our former finance minister, Tito Mboweni filled us in on pending debates to assist those suffocating in a noose of financial distress by allowing limited withdrawals from retirement saving vehicles, alongside increased preservation. This amendment to the legislation will only be implemented in 2022 at the earliest; however, it was a matter of days before enquiries trickled in from members (prematurely) on how to apply for this prospective lifeline, which could, for the first time, permit access to retirement funds prior to termination of service. However, this allowance could come in the form of a proposed two-bucket system to accommodate short term financial relief and long-term financial security.

This urge of accessing these funds whilst under employment is long existing in the industry and has been exacerbated by further financial hardships owing to national lockdown interruptions. Judging from SA’s general savings culture (or lack thereof), – it will come as no surprise for this fraternity to see a significant handful of these investors trying to get their hands on their retirement pots to meet their immediate needs. While this may be the case for many, it can be expected that a handful of these applications could well be unwarranted, notwithstanding the qualifying criteria that will accompany the concession to be granted early access, often with disregard for the implications of this action on their retirement outcomes.

It is paramount to highlight that building wealth with the most modest of salaries is achievable for individuals with diligent saving habits. The prominent narrative of postponing this discipline for when one earns more in future; has proved fatal for financial independence upon retirement, even without this proposed and inevitably colossal disruption of withdrawing your retirement savings. The legislation is intended to assist those in genuine need of this well-intended financial relief; however, it must be kept in mind that it comes at a significant cost to your seemingly far off retirement years. This requires a balancing act that demands difficult and precarious decisions, even with the much-needed guidance of a competent financial advisor.

As it stands, just under half of our citizens do not have retirement savings at all, and of those who do, only about 6% can retire comfortably, according to estimates by the Treasury.

As worrisome as these figures are, the Sanlam Benchmark survey confirms that 41% of employers who have established retirement funds for their staff, suspended contributions (for a period) to these savings in 2020. This has further placed a strain on accumulating sufficient retirement savings. This was done to mitigate the economic struggles faced by employers and/or their employees. Undoubtedly, saving for retirement has become a nauseating expense that will for some time be shifted further to the sidelines – with a focus on immediate financial obligations over long-term saving aggregation.

As bleak as the retirement outcomes look for the vast majority, generally, the size of adequate retirement savings is very often underestimated. Many employees are unaware of the need to save at least 15 times their annual salary to maintain their lifestyle post-retirement; and few realise that about R1million (saved in an average working life of 40 years) will purchase an annuity of approximately R5000 every month, according to Andre Tuck, Senior Investment Consultant at 10X Investments. Women, with higher life expectancy than men may very well need more to retire at this level of income. A member can view their mouthwatering retirement fund balance on their fund benefit statements, and in many cases, it is most likely to prove far from adequate when your retirement is approaching. In addition, an even further detriment could be for those considering early retirement.

A worthwhile deduction could be to consider saving as much as you possibly can, no matter how insignificant it might seem, as it will make a visible and much-needed difference to the accumulation of retirement savings.

Paul Nixon (Head of Investments Behavioural Finance at Momentum Investments) refers to how impractical it is to work on the mindset of wealth being a function of income, but should be considered as a function of saving – if you want to see yourself in a good and sound position to retire comfortably.

At the time of penning this article, chaos has erupted in many streets of KwaZulu Natal and Gauteng as protesters and looters inundate our social media platforms with their violent actions. It’s not the most promising start to a third-quarter that we have experienced in recent times, but in this new crazy world, one has come to expect the unexpected.

Speaking of unexpected, I was pleasantly surprised, if not slightly irked, that my teenage children had more knowledge than I on the topic that I am about to share with you. I was waxing lyrical about the similarities of a 14th-century emperor and Elon Musk. Mansa Musa was the tenth emperor of the Mali Empire in the 1300s. Musa’s wealth came from trading in salt and the substantial gold deposits he had accumulated in his empire. All three of my kids had encountered Musa in their respective school curriculums and were not hugely impressed with my supposed superior knowledge of history.

Be that as it may, I searched for more information and read a fascinating article by Khulekani Magubana in fin24. He draws parallels with Mansa Musa and Elon Musk, our very own Pretoria-born American tech billionaire. Both incredibly rich individuals have made all kinds of unpredictable and impactful waves in a relatively new market. Historical recordings state that Musa embarked on his Hajj pilgrimage in 1324. During his journey, he travelled with a caravan of 60 000 people and gave away so much gold in the cities that passed on the way to Mecca that it caused the value of gold to fall. It did not rise for 12 years. Some 697 years later, Musk (worth more than $151 billion) has influenced the price of cryptocurrencies, Bitcoin in particular, with his comments on social media and subsequent buying or selling of the cryptocurrencies depending on their value at the time.

Efficient Group Economist, Dr Francois Stoffberg, said the comparison between Musk and Musa was apt in the sense that both were extremely wealthy individuals whose influence over a finite commodity had a profound impact on the economy they functioned in. Stoffberg says that it’s a fair parallel as gold wasn’t in such high circulation in the 1300s, and cryptocurrencies are not in high circulation today. Stoffberg did state that the one crucial difference was that unlike the decade it took the price of gold to recover in 1300’s Egypt, if one individual owns many coins and a dump of coins causes a fall in value, the system can self-correct quickly.

I am a passionate history scholar and a firm believer that if we only paid heed to the lessons of the past, we may be able to deal with the challenges of the present. If you enjoyed this economic tale of Musk and Musa with its historical twist, then I would encourage you to read the reviews and perhaps even obtain a copy of a book entitled “Our long walk to Economic Freedom-lessons from 100 000 years of human history” by Professor Johan Fourie.

Please take care during these turbulent, yet historic times.

As Tax Filing Season approaches, Director of Chartered Tax, Charmaine Prout, shares some practical information on tax returns for individuals.

For many tax filing season is associated with feelings of apprehension and confusion. Most of us only do this once a year, and it can be quite bewildering and daunting to figure out exactly what we need to have on hand to submit our tax returns correctly. With SARS announcing that tax filing season for individuals will run from 1st July until 23rd November this year, it is time to start preparing the information and documents needed to submit our tax returns.

Remember that taxable income can come from many sources, and it is important to declare all income on your tax return.

We have listed some items below that you need to consider when preparing your documents.

• If you earn income from an employer, pension fund or living annuity, you will need a copy of your IRP5 certificate, which will break down the income you have received and PAYE deducted from your income and paid over to SARS on your behalf. If you have not received this already, you can request it from your employer or your retirement fund administrator.
• Are you claiming a travel allowance? If so, you will need a logbook detailing your business mileage for the year as well as your opening and closing mileage readings for the period 1st March 2020 to 28th February 2021. SARS has a template for this available on their website (2020-21-SARS-eLogbook.pdf), alternatively you can create one fairly easily using excel.
• Are you earning rental income? If you are then you will need to prepare a schedule detailing all the income and expenses relating to the rental property. Be sure to have your proof of expenses easily accessible should SARS request them.
• Do you have any bank accounts, both local and offshore that earn interest? If so, you will need an IT3(b) for each account detailing the amount of interest you earned during the year. The good news is that most banks allow you to download this using online banking.
• If you have an investment such as a Unit Trust or Share Portfolio, you will likely have earned some taxable income from this. This income could be in the form of interest and dividends or in the form of a Capital Gain if you made any withdrawals from the investment. You will need a copy of both the IT3(b) and IT3(c ) certificates which detail this income.
• Have you made use of a Tax-Free Savings Account? If so you will need a copy of the IT3(s) certificate from the provider detailing your contributions, withdrawals and profit or loss made on the investment.
• Are you the main member of a medical aid? If so, you will need your medical aid tax certificate showing your contributions for the year, the number of members on the medical aid, and any expenses that were not paid by the medical aid. This can normally be requested off your medical aid’s online portal or using the self-help menu options if you prefer to request it telephonically. In addition to your medical aid tax certificate, if you had any qualifying medical expenses that you paid and did not submit to the medical aid, you will need a schedule of these, as well as the invoices and proof of payments should SARS requests them.
• If you have made contributions towards a Retirement Annuity, you will need a copy of the contribution certificate from the provider.
• Have you made any donations to registered Public Benefit Organizations (PBOs)? Should you have you will need to request a copy of the Section 18A receipt from the organisation to claim your tax deduction.
• Take special care to mention to your tax consultant if you have sold any properties in the year under review.
• Importantly, make sure that all your personal registered details are correct on e-filing and at SARS, especially your ID number.
• If you are considering a work from home expense claim, there are specific requirements around this. Please refer to this previous article for more details.

Please remember that although most of this information should automatically pull through to your e-filing profile, you will need to have the hard copies available to submit to SARS if you are selected for a SARS verification.

As everyone’s tax return is unique and tax legislation is complex, this article is for information purposes only and is not to be construed as tax advice, nor does it consider your specific financial circumstances.

You can speak to a tax specialist from Chartered Tax for more guidance as professional specialists can add great value in helping you to keep your tax affairs up to date and in order.

In this month’s edition, John Chikoki, Senior Retirement Fund Consultant, reminds us of the importance of saving.

Most South Africans across all ages and income groups are apprehensive about their finances and what the future holds. Even though a lot has been said about the Coronavirus pandemic’s impact on employment, there has been less focus on the value of investments, even in a low-interest atmosphere.

Apart from the health risks of Covid-19, the economic fallout and the national lockdown response has made many people feel particularly vulnerable. While these financial concerns among South Africans are understandable, getting back on track with their savings and investments is one concrete step they can, and should, take to help future-proof their finances.

With the prime interest rate at record lows of 7% and many people having either lost their jobs or watched their investments drop in value in 2020, it is not hard to see why many South Africans feel uncertain about the importance of saving. But a lower-interest-rate environment does not make it any less important to continue saving money now and in the future.

At the peak of the pandemic and lockdown in South Africa, stories of workers resigning to access their retirement savings due to financial hardship were rife. As a result, some banks noticed a definite spike in the number of clients accessing their savings. While this was undoubtedly necessary to help the individuals cope financially with the challenges of lockdown, it should be emphasised that it is now vital to forsake such thinking and get back on track with saving as quickly as possible and hopefully with more vigour and long-term focus.

The wisdom of this advice is evident when one considers the valuable buffer that the savings accounts provided for the people who had such accounts during the lockdown period. Moreover, the way the savings helped them to cope with weeks and months of decreased income offers an important lesson on the need to keep on saving, even when lower interest rates make the growth prospects a little less appealing.

A healthy savings balance provides a potentially lifesaving buffer against the impact of any future crises or emergencies. A good, fixed-term savings account still offers reasonable long-term rates to help you build up a cash balance that will stand you in good stead whether in a crisis or in retirement.

Arguably the most significant impact of Covid-19 on people’s lives was a result of the fear the virus created, which caused a form of financial paralysis for many. But now that Covid-19 health risks are beginning to be less intimidating due to the availability of vaccines and the fact that the economy is gradually rebounding, we all must overcome those fears and start to rebuild our lives and finances. One of the best ways to do that is by taking action and starting, or returning to, a disciplined saving and investment tradition.