Home South African UIF introduces new stringent controls to eliminate fraud

UIF introduces new stringent controls to eliminate fraud


According to the Department of Employment and Labour, because of the introduction of the new safety measures, the fund has had to delay payments.

Employment and Labour Minister Thulas Nxesi. File photo: ANA/Bongani Shilubane
JOHANNESBURG – In an attempt to stop the fraud that has been taking place from the Unemployment Insurance Fund’s Covid-19 Temporary Employee Relief Scheme (TERS), the fund has introduced new and more stringent controls to verify banking details.

According to the Department of Employment and Labour, because of the introduction of the new safety measures, the fund has had to delay payments. 

The department said in a statement that over the weekend it had resumed payments and disbursed R372 million of Covid-19 TERS benefit claims.

“The payment covered claims for April and May lodged by 15 866 employers benefiting 78 283 employees for whose banking details passed the verification process. Further payments were done today (July 14) with about R295m paid out from 1 824 employers benefiting 76 078 workers. This brings the total paid to date since April 16 to just under R30 billion (R 29 726 359 618.48) covering 6 789 695 workers from 539 953 employers,” the department said. 
As part of the new control measures, the fund has also introduced a new rule to the system that requires applicants to insert either the Enterprise number (CK/CIPC) or the ID number of the bank account holder in the TERS online portal in order to further verify banking details against the authorised claimant.

“This requirement which may seem onerous is critical to ensure banking details are verified before any TERS payment is authorised. Failure to populate the system properly will unfortunately lead to more delays in the payment process,” said UIF commissionerTeboho Maruping.

The commissioner added that the fund has been at the receiving end of fraud complaints after it emerged that certain individuals managed to change banking details of their companies and inserted their own.

“This situation has created a need for us to do an upfront account verification and validation before the payment is made, and we expect this to increase our turnaround time by two days as the accounts are verified and validated to ensure that fraud at company level is eliminated and reduced as far as possible. We cannot overemphasise how important it is for companies to provide correct information that can be validated and verified with the banks so that there are no delays with the payment,” said Maruping.

The new changes follow the fund having paid up to R1bn directly into the bank accounts of 238 086 employees since April.

Direct payments to employees have not been affected by the new measures.