All the UIF’s coronavirus payouts were stopped amid new fraud probe

Business Insider SA
Photo: UIF
  • Business For South Africa says the Auditor-General has launched an investigation into the UIF's coronavirus payout system, which halted payments to workers. 
  • After a delay in payments due to the investigation, the UIF was given the go-ahead to resume payments from Tuesday, according to a spokesperson of the department of employment and labour.
  • According to the business body, the UIF has also "radically reduced" its call centre operations.
  • For more articles, go to

The Unemployment Insurance Fund (UIF) had to halt payments to workers who lost their income due to the Covid-19 crisis as its systems were investigated.

“It is with deep disappointment that B4SA has learned from its representatives at Nedlac that all payments of Unemployment Insurance Fund (UIF) Temporary Employer/Employee Relief Scheme (TERS) benefits have been halted pending investigations by the Auditor-General," the organisations Business For SA said.

It is understood that the auditor-general is investigating system integrity problems at the UIF related to the TERS system, B4SA says.

UIF spokesperson Makhosonke Buthelezi confirmed to Moneyweb that payments have been temporarily suspended as control "deficiencies" - including past payments made to people who are deceased, imprisoned, or who are minors - are investigated

The auditor-generals office alerted the department of labour and employment to the irregularities, Buthelezi told Moneyweb.

A spokesperson of the department of employment and labour confirmed to Business Insider that the payments have been delayed due to the investigation, but that the UIF commissioner Teboho Maruping initiated the resumption of payment on Tuesday.

"B4SA strongly supports the mitigation of fraud risks, and urges that criminal charges should be brought against all alleged perpetrators. However, the unilateral halting of all payments, and the very poor communication of the situation by the UIF leadership, is grossly unfair to all employees and their employers who have legitimate claims," the organisation said in a statement. "That the UIF system is incapable of remedying the relatively small number of fraudulent claims without disadvantaging the millions of legitimate claimants is an indictment on the UIF system."

The TERS payouts have been hit by instances of fraud, with one group of fraudsters receiving a payment of R5.7 million which was intended for 1,400 workers. 

The UIF has also picked up thousands of claims that have been submitted on behalf of dead South Africans, and found that 100,000 fake ID numbers were used in claims.

READ | Thousands of dead people ‘claimed’ for the UIF's coronavirus payouts

The TERS payouts have also been marred with long delays and technical problems, with companies complaining to Business Insider South Africa that their employees’ applications are not being processed or paid. Other applications were denied without explanation and businesses struggled with a general failure to get a response from the UIF.

“The continued delays and lack of transparency from the UIF in regard to their capacity challenges has had the unintended consequence of creating mistrust between employers and employees,” B4SA says.

It also alleged that UIF Call Centre capacity has been "radically reduced" as of last week, which will add to frustrations.

“B4SA has been urging the UIF for some time to engage meaningful third party support. A team from B4SA members is lined up to provide assistance on a pro bono basis, but so far this offer has not been taken up. Urgent intervention is required.”

The article has been updated with confirmation from the department of employment and labour that the UIF was given the go-ahead to resume TERS payment on Tuesday.

Receive a daily update on your cellphone with all our latest news: click here.

Get the best of our site emailed to you daily: click here.

Also from Business Insider South Africa: