UIF corona payouts: 157 employers investigated for fraud, R3bn in wrong payments recovered

Business Insider SA
thulas nxesi
Labour minister Thulas Nxesi
  • Nine employers have been arrested, out of 157 currently investigated for fraudulent TERS claims from the UIF.
  • In a presentation to parliament, the UIF confirmed that more than R3 billion in erroneous payments have been recovered.
  • Top UIF execs were suspended because they were ultimately responsible for TERS, the labour minister said.
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The Unemployment Insurance Fund has already recovered R3.2 billion in coronavirus payouts that were made in error, while nine employers have been arrested for fraudulent claims.

Due to incorrect UIF calculations, companies received overpayments worth billions of rands – and an estimated R1 billion was paid to individuals who were not entitled to the payouts.

In total, the UIF paid out almost R42 billion to millions of workers as part of the Temporary Employer/Employee Relief Scheme (TERS).

Netwerk24 reports that UIF acting commissioner Marsha Bronkhorst and minister of employment and labour Thulas Nxesi presented an update on TERS on Tuesday, during an online sitting of the select committee on trade and industry, economic development, small business development, tourism, employment and labour.

Bronkhorst told the committee that nine employers have already been arrested due to fraudulent TERS claims - and more arrests are expected, Netwerk24 reports.

So far, some 157 employers are being investigated for fraud. Some 90 of these companies apparently claimed for employees who don't exist, or they claimed for workers who could do their work as per usual during the first phase of lockdown. Some also claimed for employees who left the company before the pandemic.

Bronkhors said that where employers did not pay back money that was paid to them in error, the money will be deducted from any payments to the UIF in future.

In a report released last month, the auditor-general outlined various problems it found with the TERS system, including that the UIF did not sufficiently corroborate information it received from applicants.

This resulted in fraudulent payments, which included that almost R696 million was paid to foreigners who have not made UIF contributions in the past 12 months. Payments were also made to the accounts of dead people, to children and to prisoners.

The AG report resulted in the suspension of top UIF executives: its commissioner Teboho Maruping, chief financial officer Fezeka Puzi and chief operations officer Judith Kumbi.

Nxesi told the select committee that while there is no indication that they were involved in fraudulent activities, the executives were ultimately responsible for TERS, Netwerk24 reports.


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