Owing the Fund does not have to cost you the letter
Most employers who fall behind with the Compensation Fund believe they have to clear the whole balance before they can get a letter of good standing again. They do not. The Fund issues the letter month to month to employers on an approved instalment arrangement. This service gets you onto one.
Independent paperwork service. ProperSA is an independent private company, not the Compensation Fund. You can file your returns and apply for an instalment arrangement yourself. Our fee pays for it to be prepared, filed and followed correctly.
What the Fund actually checks
A letter of good standing is issued only when four things are true at the same time, and the Fund lists them plainly:
- You are registeredSection 80 of the COID Act.
- Every return of earnings is inSection 82. One missing year is enough to stop the letter.
- You are fully assessedSection 83, up to the current assessment year.
- Outstanding debt is paid or settledSection 86. That word settled is the one this whole page turns on.
The Fund’s stated turnaround once you qualify is five days.
You do not have to pay it all first
In the Fund’s own words: letters of good standing will also be issued on a month to month basis to employers that have entered into an instalment arrangement.
That single sentence is the difference between a business that can bid for work and one that cannot. We meet employers every week who have written off tenders and contracts because they owe five figures and assumed the door was shut until it was cleared. It is not.
The instalment terms, in full
These have applied since 1 January 2013 and we would rather you saw them before you commit than after.
| Term | What it means |
|---|---|
| 20 percent upfront | A fifth of the balance is required before the arrangement is approved. On R10 000 that is R2 000. |
| 12 months maximum | The arrangement cannot be spread longer than a year. |
| Interest at prime | Interest is levied at the prevailing prime rate on all instalment arrangements. |
| Miss one and it all falls due | Should an instalment fall overdue, the full balance becomes payable immediately. |
| Court orders | The Fund says employers will be served with court orders for instalments not honoured. |
So an arrangement is worth entering only if the monthly figure is one the business can genuinely carry for a year. Working that out honestly, before you sign, is part of what you are paying us for.
Check what the balance is made of before you agree to it
When an employer stops filing returns of earnings, the Fund does not stop assessing. It assesses anyway, up to the current year, so that the account can be brought current. Those assessments are not built on what you actually paid your staff, because you never told the Fund what that was.
That matters most for the years a business was quiet. If you were in hospital, or the work dried up, or the company traded for three months out of twelve, the real figures for those years are not the figures sitting on your account. Filing the actual returns is what corrects the balance, and it is the first thing we do rather than the last.
We will not tell you your balance is wrong before we have read your notices. We will tell you what it is built from, in writing, and then you decide.
What you get for R1 890
- Your account read properlyEvery assessment notice and statement gone through, so you know which years are assessed, which are estimated and what is penalty and interest rather than assessment.
- Every outstanding return of earnings filedHowever many years are behind, on CompEasy, at one fixed fee rather than per year.
- The account brought to a correct assessmentActual earnings declared for each year, including the quiet ones, so the figure you are asked to settle is the right one.
- Your industry subclass checkedA wrong subclass does not just inflate this balance, it has inflated every year you have traded. If it is wrong we tell you what correcting it is worth before you spend anything on it.
- The instalment application prepared and lodgedWith the deposit and the monthly figure worked out against what the business can actually carry, and motivated properly.
- The letter chased once the arrangement is in placeAnd the monthly renewal diarised, because the letter is issued month to month and lapses if the arrangement does.
Not sure whether this is your situation? Ask us first and you get a written answer within one business day.
What this does not cover
- The debt itselfThe balance, the 20 percent deposit and the interest are owed to the Compensation Fund and paid directly to the Fund. Our R1 890 is the service fee only.
- A guarantee of approvalThe decision is the Compensation Commissioner’s. We make the application complete and correct, which is what approval turns on, but nobody can promise the outcome.
- A promise that the balance comes downSometimes filing the real returns reduces it and sometimes it does not. We tell you which before you pay the Fund anything.
What we will need from you
- Your Compensation Fund employer number, the one starting 99, from any notice or previous letter.
- Every assessment notice and statement you still have, including the one showing the balance. Photographs of them are fine.
- Actual earnings paid for each outstanding year, even where that figure is nil or close to it.
- How many people you employed in each of those years, including casual staff and any directors drawing a salary.
- Your CompEasy login if you have one. If not, we tell you how to reset it.
- What the business can genuinely afford monthly, because an arrangement you cannot carry is worse than none.
Frequently asked questions
Can I get a letter of good standing if I still owe the Compensation Fund?
Yes, if you are on an approved instalment arrangement. The Fund's own notice to employers says letters of good standing will be issued on a month to month basis to employers that have entered into an instalment arrangement. You do not have to clear the whole balance first, which is what most employers believe and why they give up.
What are the Fund's instalment terms?
Since 1 January 2013: 20 percent of the balance owed is required upfront, the arrangement runs for a maximum of 12 months, and interest is levied at the prevailing prime rate. If an instalment falls overdue the full balance becomes payable immediately, and the Fund says employers will be served with court orders for instalments not honoured.
What does the Fund check before it issues a letter?
Four things, and all four must be true. You are registered under section 80 of the COID Act, you have submitted all returns of earnings under section 82, you are fully assessed under section 83, and all outstanding debt is paid or settled under section 86. An instalment arrangement is how the fourth one is satisfied without paying everything at once. The Fund's stated turnaround for issuing the letter is five days.
Could my balance be wrong?
It might be. If you stopped filing returns of earnings, the Fund assesses you anyway to bring the account up to the current year, and those assessments are not built on what you actually paid your staff. Filing the real returns for the years you were quiet is what corrects the figure. We read your notices and tell you what the balance is actually made of before you agree to pay it.
What if I was not trading at all for some of those years?
Then the returns for those years should reflect that, and the assessments raised on estimates should come down accordingly. It still has to be declared and filed. Nil trading is not the same as nothing to file, and an unfiled year keeps the account out of good standing no matter how quiet the business was.
Does this include the money I owe?
No. Our R1 890 is the service fee for the filing, the assessment and the arrangement. The balance itself, the 20 percent upfront and the interest are owed to the Compensation Fund and paid directly to them. We tell you the exact figures in writing before anything is agreed.
Can you guarantee the Fund approves the arrangement?
No, and nobody can. The decision is the Compensation Commissioner's. What we control is that the returns are filed, the account is correctly assessed and the application is complete and properly motivated, which is what an approval turns on.
What happens after the letter is issued?
It is issued month to month while the arrangement runs, so it has to be renewed each month and the instalments have to be paid on time. Miss one and the whole balance falls due and the letter stops. We diarise it so that does not happen by accident.
Not in arrears, just due for renewal?
If your account is clear and the letter has simply lapsed because the return of earnings is due, that is the R690 renewal rather than this.
Letter of good standing, R690Assessment far too high for the work you do?
The tariff gap between industry subclasses runs to about fifteen times. If the Fund has you in a riskier class than your work justifies, a correction is R890 and it changes every year from here.
Check my subclassGeneral information about South African law, not legal advice. The criteria for a letter of good standing and the instalment settlement conditions above are the Compensation Fund’s own, published in its notice to registered COIDA employers, and the instalment conditions have applied since 1 January 2013. Section references are to the Compensation for Occupational Injuries and Diseases Act 130 of 1993. Assessment decisions, arrangement approvals and processing times are the Fund’s and are outside our control. Confirm anything that matters to a decision with the Compensation Fund on the day.