06 Aug SwissFin – SwissSure Newsletter August 2020
We welcome you to the latest edition of our Newsletter.
We are excited to share some positive and interesting articles with you, although our headlines are still dominated by the Covid-19 implications. Following a recent Western Cape High Court case, which was ruled in favour of the policyholder, commercial insurers are coming to the party and are settling Covid-related claims. You will find detailed information under the short-term chapter further below.
Please take note that we are all still working from home and will do so until lockdown stage 1.
Our office is not attended and you will find all staff contact details at the end of this newsletter.
As usual, this newsletter can be viewed under https://www.swissfin.co.za/newsletters/swissfin-swisssure-newsletter-august-2020
Enjoy the reading, with best regards,
Your SwissFin / SwissSure Team
- Interest rates: Bank deposits, insurance plans, tax-free investment amounts and our foreign exchange rates
2. LOCAL AND INTERNATIONAL FINANCIAL NEWS
4. SWISSSURE: SHORT-TERM INSURANCE NEWS
- FSCA releases press statement on business interruption claims
- High Court rules against insurer who rejects Covid-19 business interruption claim
- Insurers announce multi-Billion relief to contingent business interruption policyholders
6. HEALTH INSURANCE
- New validity extension for licences that expired during lockdown
- Ford finally offers some compensation
- No date in sight for the arrival of AARTO
- Our staff contact details
- We value your comment
Interest rates: Bank deposits, insurance plans, tax-free investment amounts and our foreign exchange rates >>
We offer the following rates as of August 2020:
Interest rates ››
- Our Money Market Fund
- 4.84 %
- 12 Months bank deposits
- 4.33 %
The minimum investment R 100’000. Terms and conditions apply. The rates do fluctuate on a daily basis and the interest rate depends on the investment amount.
Insurance Plans: “Guaranteed income/growth plans” (5-year term), approx. 80% of income tax-free: ››
- Gross yield
- Taxes payable
Tax-free interest income – maximum investment amounts: ››
R 2,57 Mio. for taxpayers under the age of 65
R 3,89 Mio. for taxpayers between the age of 65 and 75
R 4,25 Mio. for taxpayers over the age of 75
These figures mean that you can invest these amounts in i.e. our money market or fixed deposit offerings and not pay any tax. Couples married in community of property can double these amounts!
Underlying assumptions: 4,0 % effective interest rate and no other income sources.
SwissSure Forex Rates ››
- Bank A
- Bank F
- Bank N
- Bank S
- Our Rate
The above table shows that our rates are very attractive compared to commercial banks. Over and above, we do not charge any fees when the funds are credited or transferred to another local account.
2. LOCAL AND INTERNATIONAL FINANCIAL NEWS
South African Reserve banks cuts repo rate again! ››
The Reserve Bank announced another cut of 0.25% on Thursday 23 July 2020, which followed the previous cute by 0.5% at the end of May.
This is the fifth cut since March this year – it is equal to a total reduction of 2.75% to a repo rate all-time-low of 3.5%!
Please click here to see the historic chart:
Supplementary budget review ››
Our Finance Minister, Mr Tito Mboweni, released the Supplementary Budget Review on the 24th of June 2020.
As expected, he painted a bleak picture, coming as no surprise given that conditions have deteriorated from the already weak position prior to the crisis. Even with the countercyclical fiscal and monetary measures implemented, including the R500 billion COVID-19 support package, rate cuts and easing of financial conditions, our position remains tenuous.
These are the Budget highlights:
- GDP forecasted at -7.2% in 2020 – its largest contraction in almost a century – and growth by 2.6% in 2021
- Tax revenue shortfall expected to be R 304 Billion for 2020/21
- Main budget deficit up to 14.6% of GDP, from 6.8%
- Gross bond issuance at R 462.5 Billion, from R 337.7 Billion
- Debt-to-GDP to peak at 87% of GDP in 2023/24
With all eyes on the state of our public finances, the Budget outlined spending reprioritisation, however the glaring issue being faced currently is that revenue collection has collapsed. As a result, the debt trajectory has steepened, and National Treasury now expects government borrowing to be close to 81.8% of GDP this year, eclipsing the previous 65.6% forecast. Borrowing will be supplemented by USD 7 billion, which the government intends to borrow from multilateral finance institutions, including USD 1 Billion from the New Development Bank and USD 4.2 Billion from the IMF.
In his speech, the Minister emphasised the burden of borrowing that will need to be repaid in the future. Contextualising our level of indebtedness, he commented on the reality of countries facing sovereign debt crises, once borrowing reaches unsustainable levels. He also made reference to examples such as Argentina, Zimbabwe, Greece and Germany in the 1920’s, which faced these challenges, but stated the intention to avoid this path.
This Supplementary Budget made it clear that public finances are currently overstretched and that over the coming months, government will need to detail far-reaching reforms. Reprioritising expenditure is however not sufficient to tackle the current situation, and greater action is needed in order to curtail spending. Unfortunately, we continue to face the conundrum of needing to stimulate growth in the face of austerity. And unfortunately, we can expect to see some tax increases in the forthcoming medium-term expenditure framework.
Tax filing season to open on 1 September 2020 ››
1 September marks the beginning of Tax Season. As from this date, taxpayers can submit their Income Tax Return (ITR12) to SARS for the 2020 tax year (period 1 March 2019 to 29 February 2020). The deadlines are as follows:
- Manual returns: From 1 September 22 October 2020
- Electronic returns (e-filing): Deadline is the 16 November 2020
- Provisional taxpayer with e-filing: Deadline is the 29 January 2021
Please also note that provisional taxpayers have to submit the second return by the end of August 2020.
4. SHORT-TERM INSURANCE NEWS
FSCA releases press statement on business interruption claims ››
The governing body for the financial sector industry, the Financial Sector Conduct Authority (FSCA), has expressed their view on Covid-related claims.
The FSCA’s interpretation of the various policy wordings mirrors the Western Cape High Court judgement (see next article).
To read the FSCA’s statement, please click here.
High Court rules against insurer rejecting Covid-19 business interruption claim ››
The Western Cape High court recently opened up the doors for more policyholders to claim for losses under the Business Interruption section due to Covid-19.
It was held that the lockdown itself was not the direct cause of the loss, but rather the spread of the virus.
We have engaged with all our clients from the hospitality sector and the following information is important to have a potential claim:
- The insurance policy firstly needs to have a business interruption section.
- Such section needs to show an extension like “contagious disease”, “Contingent Business Interruption” or similar.
Click here to read the Court’s ruling.
Insurers announce multi-Billion relief to contingent business interruption policyholders ››
The recent Court ruling (s. article above), has finally given directions on the interpretation of business interruption wordings for the hospitality industry.
Santam, H&L, Bryte and Hollard have published information on how they will be dealing with these claims. Our office has already informed all relevant policyholders.
Policyholders who meet the following criteria will receive relief payment:
- They must have a commercial policy with a Business Interruption section, followed by a CBI or contagious disease extension.
- The CBI extension must have been taken out before 18 March 2020 – from which date underwriting restrictions related to infectious disease were introduced.
- The policy must still be in force.
- The policyholder must have incurred a loss due to the impact of COVID-19 and or the lockdown.
- The policyholder must not have been an essential service provider able to trade through the lockdown.
- The policyholder must operate in the hospitality and leisure or the non-essential retail services industries. These industries include restaurants, guesthouses, hotels, lodges, entertainment and self-catering businesses.
- The policyholder must have registered the claim.
New COVID-19 concessions announced for foreign nationals in South Africa ››
The Minister of Home Affairs, Dr Pakishe Aaron Motsoaledi, announced on the 22 July 2020 that he was extending all permits and visas that were due to expire during the lockdown from the end of July to the 31st of October 2020.
This means that any foreigner can remain in South Africa by such date without an extension.
We believe that this deadline will be moved again due to the outlook of the lockdown stages.
The information was passed during a press conference and we are still awaiting the Government Printer’s Gazette.
Further suggestions were made by the Minister to the Disaster Management Council, which will probably be implemented:
- VFS is to re-open at the beginning of September for local submissions only. This will not be for all types of applications.
- The VFS online booking system is to be available from 3 August.
- No change of conditions are allowed within SA.
- Documents that have expired during the lockdown will still be considered to be valid.
- We will keep you informed on further developments.
6. HEALTH INSURANCE
BDAE offers the Infinity Health Insurance plan again ››
The flagship product was suspended at the beginning of the Covid crisis in March.
The BDAE gave the green light for new applications as from mid-July and has also joined up with another insurer, Swiss Life France, who underwrites the product.
The Infinity Plan is geared for Europeans living outside the EU borders, seeking worldwide comprehensive health insurance coverage with free choice of doctors and hospitals. Applicants can join up to age 75.
Should you require further information, please contact Tony R. Hug – .
New validity extension for licences that expired during lockdown ››
The Department of Transport has gazetted new changes to the validity period for driver’s licences in South Africa. It includes detailed information on the revised expiration dates for motor vehicle licence discs, driver’s licences, temporary permits, roadworthy certificates, and others which expired during the lockdown period.
Licensing centres across the country have begun to reopen, but many are operating with reduced staff due to COVID-19 restrictions.
The new expiration dates for licenses which originally expired during the lockdown period are shown below:
31 August 2020: All motor vehicle licence discs, temporary permits and roadworthy certificates that expired during the period that commenced from 26 March 2020 up to and including 31 May 2020 are deemed to be valid and their validity period is extended for a further grace period ending on 31 August 2020
30 November 2020: Motor trade number licences that expired during the period that commenced from 26 March 2020 up to and including 31 May 2020 are deemed to be valid and are extended for a further grace period ending on 30 November 2020
31 January 2021: All learner’s licences, driving licence cards, temporary driving licences and professional driving permits that expire during the period that commenced from 26 March 2020 up to and including 31 August 2020 are deemed to be valid and their validity period is extended for a further grace period ending on 31 January 2021.
You can click here to read the government gazette.
Ford finally offers some compensation ››
The Ford Motor Company of South Africa (FMCSA) will have to pay R 50’000 to each of the 56 consumers who bought the infamous Ford Kuga vehicle, which made headlines for combustion and catching fire.
The National Consumer Tribunal confirmed in a communique at the end of March that a settlement agreement was entered into between FMCSA and the National Consumer Commission (NCC). The settlement is for the Kuga’s that were produced from 2014 to 2017 and the fire must have originated in the engine compartment.
The commission received a total of 160 claims, but the investigation revealed that only 56 vehicles were affected by a lack of cooling circulation that caused the engine to overheat and catch fire.
Affected customers can contact the NCC on 021-4287000.
No date in sight for the arrival of AARTO ››
The Covid-19 crisis has put brakes on the controversial traffic infringement fines legislation, which would have seen penalized drivers losing their licences.
The Ministry of Transport informed at the end of March that the AARTO Act has been postponed indefinitely because of the Corona virus health crisis. The impact of the Covid-19 has severely compromised the capacity of the Road Traffic Infringement Agency (RTIA), which is the entity for the rollout and implementation of AARTO.
The agency said that the situation will be reviewed and decide at a later stage when the rollout will be implemented.
We will keep you up-to-date on further developments.
Contact details of SwissSure staff ››
As you know, we are all working from home and our office in Century City is not attended.
This has no impact on our service levels and our response times are unchanged.
You can contact us via e-mail and should you wish an appointment, Mr Tony R. Hug and Mr. Marius C. Romer are always available.
You can contact us as follows:
: Specialist on our GolfEstateSure product and immigration matters
: Short-term claims
: Domestic short-term clients with surname A – L
: – Domestic short-term clients with surname M – Z
– Commercial short-term clients
You can also contact us on our WhatsApp office number +27 66 197 8875.
We will keep you updated on any organisational changes.