Question:
I will be retireing in March 2016, but will only have 19 years of service. At the bank you can draw one third of your pension cash without paying tax, what I want to do, but the rest won't be enough to live on. Can I claim UIF, I paid it in for the 19 years. Hope you can help me. I need the one third of the money because we want to build a flatlet for us, so I will need the cash, but nobody can tell me if I can claim UIF, which is quite a lot. Thanks.
Answer:
Sonja, Note that you will pay lump sum tax on your one-third cash portion, per our tax law. Only the first R500 000 (and contributions not allowed for tax) are returned tax-free. UIF is an unemployment insurance fund for people who have lost their job involuntarily and who plan to work again, and who actively seek new work. If you are voluntarily retiring then you can not claim UIF (although other people in your position have successfully claimed UIF, possibly by lying on their application form).
