You have the proof of payment. The Compensation Fund has the money. The statement still shows the assessment outstanding, the balance is still growing, and the Letter of Good Standing you need will not issue. Nothing has gone missing — the payment simply was never allocated, and on the Fund’s books an unallocated payment and an unpaid assessment look identical.
Paying and settling are two different events
A COIDA assessment is a specific debt for a specific assessment year, raised against a specific employer registration number. Settling it means a payment being matched to that debt. The transfer is only the first half.
When the match does not happen, the money sits on the Fund’s side as an unallocated receipt while the assessment stays open. Everything that keys off the assessment then behaves as though you have not paid: the balance stands, interest accrues on it, and good standing is refused.
This is the part that costs money. Interest is charged on the balance the records show, not on what you actually owe. Section 86 of COIDA provides for interest on an overdue assessment at a rate determined by the Director-General, and the Fund applies it to the open balance. An unallocated payment therefore accrues interest on money already in the Fund’s bank account — and it does so quietly, for as long as nobody looks.
The five things that actually cause it
1. The reference was wrong, or missing. Allocation is driven by the reference on the payment. A transfer sent with the company name, an invoice number, or a reference from a different government account gives the Fund nothing to match against. It is the single most common cause and the easiest to prevent.
2. The payment went against the wrong assessment year. An employer with two or three years outstanding pays what they can and the payment lands on the oldest open item, or the newest, rather than the one that was blocking the letter. The account total falls but the specific assessment stays open.
3. The business appears twice. A company that registered a second time — after a name change, a lost registration number, or a re-registration someone did rather than trace the original — has two records. Payments land on one, assessments accumulate on the other, and both look wrong.
4. The money went to the wrong fund entirely. Employers in mining and metals fall under Rand Mutual, not the Compensation Fund. Paying the one while being assessed by the other produces an account that will never reconcile no matter how many times it is queried.
5. It was allocated to somebody else. Rarer, and the reason a reference matters. A payment carrying a reference that resolves to another employer is allocated to that employer.
How to get it corrected
Start with the statement, not the argument. Request a full account statement from the Fund covering every assessment year in question. You cannot show a payment is misallocated until you can see where the Fund thinks it went — and often the statement alone reveals the answer.
Line the payments up against the assessments. For each payment you have made, identify the assessment it was intended to settle. Work in amounts and dates, because that is what the Fund will match on. Round numbers that appear on your bank statement and nowhere on the Fund statement are the ones to chase.
Submit proof with the allocation you are asking for. A stamped proof of payment or bank statement showing amount, date and reference, the employer registration number, and an explicit instruction as to which assessment each payment must be applied to. Do not leave the Fund to infer it — inference is what produced the problem.
Then ask for the interest to be recalculated. This is the step most people skip. Once payments are correctly allocated, the interest charged on the incorrectly open balance should be revisited. Reallocation without recalculation leaves you paying for the Fund’s filing.
How to stop it happening again
- Use the employer registration number as the payment reference, every time, exactly as it appears on the assessment notice.
- Pay each assessment as its own transaction. One lump sum covering three years is three allocation decisions somebody else gets to make.
- Keep the proof of payment with the assessment notice it belongs to, not filed by date.
- Check the statement after paying rather than assuming. A payment that has not allocated is visible within weeks and much cheaper to fix then.
When a deadline is the real problem
Most people looking this up are not accountants reconciling for its own sake. There is a tender, a main contractor, or a client asking for a letter, and the account will not produce one.
If that is you, sequence matters. Reconciliation first, then the letter — the letter is issued on the state of the account, so there is no way to get it while the account still shows arrears. A payment arrangement will not help either, because the debt you would be arranging to pay is one you have already paid. An arrangement is the right tool for a genuine shortfall, not for a filing error.
ClearComply is a software company and does not act for the Compensation Fund. We match businesses with the practitioners who do this work and track the deadlines that follow. If your account will not reconcile, a registered labour practitioner can take it on — tell us where the account stands and you will get a straight answer on what has to happen first, including when that answer is that you can do it yourself.
Questions we get asked
Will they refund me if I paid twice? Usually the second payment is allocated forward against the next assessment rather than refunded. Ask explicitly if you want it back, and expect that to take longer than allocation.
How long does reallocation take? It depends on how clean the evidence is. A single payment with a clear proof and an obvious intended assessment moves faster than three years of mixed payments against a duplicated registration. Send complete evidence the first time.
Can I withhold this year’s assessment until it is fixed? No. Section 86 requires payment within 30 days of the notice or in instalments approved by the commissioner, and an unresolved allocation query on a previous year is not a defence. Withholding adds a second problem to the first.
Does this affect my other compliance? A COIDA account says nothing about SARS, UIF or CIPC. Each has its own process, and ClearComply does not handle SARS or UIF — speak to a registered tax practitioner for those.
ClearComply is a private commercial software provider and is not affiliated with, authorized by, or an official agency of CIPC or any government entity. We are not the Compensation Fund or the Department of Employment and Labour. Letters of Good Standing are issued by the Compensation Fund, not by us.