The Return of Earnings (ROE) for the Compensation for Occupational Injuries and Diseases Act (COIDA) has been causing problems for accounting firms and their clients. COIDA falls under the Department of Labour (DOL). These problems are critical – for many firms, being in good standing is critical to them as without a letter from the DOL to this effect, people are turned away from mines or construction sites and thus cannot do their work. In addition, they may not be able to secure tenders. Where did it begin? The discounts and the amnesty Last year the DOL introduced an online facility for companies to complete their ROE. This was done as the department was struggling to assess all ROE returns. Despite the online version being introduced, the DOL still did not assess all 2012 returns. In designing the new online version, all businesses were assigned new reference numbers. This year the DOL decided to incentivise businesses to use the online facility and offered –
- A 10% discount if your return was submitted by 30 April and payment was made within 30 days after the assessment,
- A 5% discount if your return was in by 30 April and you paid within 60 days after the assessment,
- A 2% discount if your return was in by 30 April and you paid within 90 days after the assessment.
These incentives have been granted for the 2012/13 financial year. In addition, the DOL announced an amnesty for all businesses registered with the department but who had not completed ROEs in the past four years – these also had to be completed by 30 April. Bear in mind that the returns had to be in by 30 April or businesses faced penalties, interest and no letters of good standing if you have not submitted your ROE form and paid the invoice. What happened? An “offer you can’t refuse” All in all, it was a classic “offer you can’t refuse” and particularly because of the amnesty and discount incentive, there was a surge in online ROEs. This put strain on the system and there was frequent downtime on the website, resulting in businesses not being able to submit their ROEs on time. Some examples of the issues faced are –
- As noted above, reference numbers were changed with the introduction of the new online system and many clients were not aware of this,
- Employers’ 2012 manual submissions were not always recognised by the online system. When they submitted the 2013 ROE they were charged and assessed twice (once for the 2012 year), and are now battling to claim the additional assessment back from the DOL,
- Other clients who had manually submitted in 2012 were never assessed and when the system forced them to update the 2012 information they were charged penalties for filing late, although they did file last year in time,
- For those who stayed on the manual system, April was the time of the postal strike and thus many manual returns missed the 30 April deadline as the clients received the forms late,
- Throw into this widespread confusion about the discounts as a result of which many companies deducted the applicable discount when making their payment. However, the process for the deduction or repayment of the discount has not been finalised by the DOL and the DOL system is showing these companies as short paid.
Despite all of the above, the DOL did not give businesses more time to complete their ROEs and thus in the above cases, these entities face penalties and interest costs, and cannot obtain a letter of good standing. SAICA (the South African Institute of Chartered Accountants) has also requested extensions for the filing period and has submitted documents to the DOL setting out problems that members are experiencing. This is not the only Compensation Fund department that is experiencing systems and organisation performance issues. We must just hope that the ongoing efforts of SAICA and other role-players bring about a speedy resolution. © DotNews, 2005-2013. This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.