U-turn as UIF coronavirus Ters payouts resume

Minister of Employment and Labour Thulas Nxesi has said the Unemployment Insurance Fund (UIF) will soon resume its Temporary Employer/Employee Relief Scheme (TERS) payouts.

Nxesi was briefing Parliament’s oversight committee on employment and labour on Wednesday morning.

This comes as it emerged that Auditor-General Kimi Makwetu had conducted a preliminary audit of the payments of TERS benefit funds to companies as a form of relief from the economic impact of the Covid-19 pandemic.

As a result of the probe, the Unemployment Insurance Fund had to halt payments to workers, as Business Insider reported.

Early in the meeting on Wednesday, Deputy Minister of Employment and Labour Boitumelo Moloi acknowledged that the system was dogged by challenges including overpayments, underpayments, fraudulent activities, and delays. Moloi said the problems were being addressed.

Democratic Alliance MP, Michael Bagraim, asked the UIF delegation what progress they had made in investigating the “transgressions” in the payment system, and who was responsible.

“We know the AG closed down the UIF payments completely,” said Bagraim. “We also know that it’s because they believe it’s because of past transgressions. Is this also because of fraud now, and who has been suspended as a result of these transgressions?”

Nxesi, in reply, said the Auditor-General’s audit of the TERS payments was part of a process of strengthening financial controls following a request by President Cyril Ramaphosa.

“We also invited officials to invite the AG to perform an interim audit. We have already engaged the AG on this interim audit of TERS benefit payments. He has made preliminary observations and his final findings will be in the final report,” said Nxesi.

Nxesi said the TERS relief scheme had paid out more than R40 billion to some 9 million employees since the beginning of the national lockdown.

Democratic Alliance (DA) employment and labour shadow minister Dr Michael Cardo confirmed to The Citizen that payments had indeed resumed, but in the same breath, said there were still glaring information gaps with the update. 

Cardo expressed his concern that labour minister Thulas Nxesi has still not issued a public statement on the sudden payment suspension. 

He added that it is not yet known when Ters payments were initially suspended, or how severe the impact of the suspension has been. 

Cardo said he gets around 300 emails a day from desperate people wanting to know when they will receive their Ters benefits. He said UIF payouts, such as maternity and unemployment benefits, have taken a backseat as well. 

“People can’t buy nappies for their babies or put food on the table,” he said. 

The Ters benefit is intended to help mitigate economic damage caused by Covid-19 by ensuring that workers who had their salaries cut, or who have been unable to work due to lockdown regulations, receive some form of income put food on the table and meet their financial obligations. 

ALSO READ: Ters suspension will hurt business and workers alike

A statement to stakeholders and organisations involved in employee matters was sent out by the Department of Labour informing them of the payment suspension, but this was made not made public until The Citizen reported on the matter on Tuesday.  The reason for the suspension was suspected fraudulent payments to individuals. claiming Ters funds. 

Now, beneficiaries will also now have to wait longer than previously anticipated for payouts, with Cardo saying this is a real “spanner in the works” for disadvantaged communities heavily dependent on Ters payments for their survival. 

He said in Wednesday’s meeting there was “a complete lack of transparency and evident caginess from the director-general [Nkosinathi Nhleko] and the minister”. 

“It is significant that the minister (did not say) say something. The confusion and anxiety is such around the suspended payments that he himself should say something.” 

In a press release issued by the DA on Wednesday, the DA called for transparency, urging Nxesi to “share with the public the real extent of the problem as uncovered by the Auditor-General and explain what is being done by specialist forensic auditors to get to the bottom of it.

“He also needs to indicate whether any officials from the UIF and/or the Department of Employment and Labour have been suspended pending the outcome of the investigation.” 

Business 4 South Africa also released a statement on Wednesday, calling for the department to remove the current deadline for April and May Ters claims, pending the outcome of the suspended payouts. 

Cardo said another meeting, this time a question-and-answer session with Nxesi and other officials, has been scheduled for Wednesday afternoon.

Attempts to contact the Department of Labour and the Unemployment Insurance Fund have so far been unsuccessful.

Additional reporting, News24 Wire

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