Labour minister says investigations have so far resulted in the recovery of R3.5 billion in wrongful payments
PARLIAMENT – The Unemployment Insurance Fund (UIF) has instituted 75 criminal cases in relation to fraud around its Temporary Employer/Employee Relief Scheme (Ters) payments during the Covid-19 pandemic, Labour Minister Thulas Nxesi said on Tuesday.
Nxesi told the National Assembly that as a result, 11 people have been arrested and 10 have been brought before court so far.
The Special Investigating Unit (SIU) has been looking into 157 cases and has so far finalised 67, with the other 90 probes still ongoing, the minister added.
This included 38 cases of employers withholding benefits or only partially paying these over to their staff, eight cases where incorrect banking details were supplied and 90 cases of suspected outright fraud, including claims by ghost applicants, and employers and their staff colluding to submit false claims.
Nxesi said the investigations have so far resulted in the recovery of R3.5 billion in wrongful payments.
“My thanks to the many honest, responsible employers who returned overpayments after realising a mistake had been made. Often benefits were calculated on the basis of incorrect information. For others who returned overpayments – conscience is a wonderful thing, but it also helps if you know that the auditor-general is looking into the payments and that the SIU will be investigating,” he said.
Auditor-General Kimi Makwetu lifted the lid on an alarming level of financial mismanagement and fraud surrounding Ters payments in a first report looking at initial disbursements in the new scheme for the first month of the nationwide lockdown.
Makwetu is compiling a second report on payments in the coming months.
Nxesi said after all Ters payments were suspended for two and half weeks in September, improved controls red-flagged mistakes once applications were allowed to resume.
“During the first payment run on the 21st of September 2020, after the suspension of Covid-19 Ters payments, where errors were detected, payments were rejected as part of the new controls. So, the holes are being plugged.”
He warned, however, that since Makwetu’s second report covers the period before controls were tightened, it might yield similar observations to the first.
The UIF has so far paid out R49.5 billion in special relief funding to about five million workers.
There are calls at the moment for the benefit to be extended for another month, since the government opted to extend the state of disaster until November 15.
Nxesi warned, however, that the UIF was not a bottomless pit and was bracing itself for a deluge of regular unemployment claims after official statistics showed that 2.2 million people lost their jobs in the second quarter of the year as the impact of the lockdown shook the economy.
Nxesi in early September responded to Makwetu’s findings by suspending UIF commissioner Teboho Maruping and has turned a deaf ear to opposition calls to take political responsibility for the chaos that accompanied the new benefit system.
On Tuesday, he said he had from the outset directed the UIF not to make any Ters payments until “there were clear systems and verification tools in place”.