Annual Assessments

This is the time of the year that you must prepare for the submission of your annual Return of Earnings to the Compensation Commissioner’s office and the subsequent payment of your annual assessments.  In other words, render unto Caesar the things which are Caesar’s.  But, at the same time beware.  The State has a nasty habit of changing financial software programmes with an obvious inherent risk for you the employer.  It is for this reason that I intend to discuss the main issues that you should address in connection with the payment of assessments.

Issues relating to assessments to take note of

(a)    Maximum Earnings imit for assessment purposes
On the Return of Earnings form there are two different parts to be completed by you.  The first part is the declaration of the actual earnings of your employees for the previous financial year.  The maximum amount was published last year in the form of a Notice in the Government Gazette.  The second part will form the basis for the provisional assessment for the current financial year.  The maximum earnings on which the assessment is based will be published in the Government Gazette in the first few months of this year.  Your assessment will thus be structured as follows:
Final assessment for the previous year, plus
Provisional assessment for the current year, less
Provisional assessment for the current year that was raised the previous year.
Make sure that this credit is taken into account.

(b)    Assessment rate applicable to your business
Due to the system of industrial rating your business operations are classified under a specific subclass associated with the risk attached to the operations.  The subclass bears an assessment rate which might change from year to year depending on the performance of the group that falls under the specific subclass.  Should you wish to check on the rate applicable to your business, you can find it on the website of the Department of Labour.

(c)    Keep abreast of times
I find it strange that only a few people dealing with the workers’ compensation administration endeavour to get hold of Government Gazettes dealing with this subject.  To be able to know what the maximum earnings limits are for assessment purposes, how compensation will be calculated for a specific year, what the increases in the pensions are and many other topics can easily be obtained free of charge by accessing the internet and downloading the Government Gazettes.  The website address of this service of the South African Government Information is:
You then proceed to “Notices” on the menu and you have all the Gazettes at your disposal.  The website also makes provision for many other documents such as Acts and Bills.

(d)    Filing system
I often come across the situation, when asked to assist, that the employer has no proper filing system; the result is that the paper trail is so inadequate that the CC’s office gets away with murder.  If the Returns of Earnings and the subsequent Notices of Assessment are properly stored or electronically captured it makes it so much easier to determine the nature of the problem.  Remember the hard copy file in the CC’s office is often not available with the result that you are unable to follow the course of events and eventually land up with a loss of capital.  The noises coming from the CC’s office is that decentralization will during 2012 be accelerated, something that can aggravate your position as a client.  The solution to this threat is to keep your own house in order and at all times be able to produce the necessary evidence, even when it comes to the inevitable litigation that might follow.

Next month we will have a look at the so-called decentralization.

Till next month