UIF running out of money

In a report released last month, the Auditor-General outlined that Unemployment Insurance Fund’s (UIF’s) Covid-19 Temporary Employer-Employee Relief Scheme (Ters) payments were made to dead people, children, prisoners as well as foreigners who had no made contributions to the fund for 12 months.

This resulted in billions of rands going down the drain. Now news has surfaced that the fund will struggle to fulfil its mandate in future as the Covid-19-induced economic crisis deepens.

Officials, led by Deputy Auditor-General Tsakani Ratsela, told members of Parliament last week Tuesday that the fund is running out of money, due to having to pay out Ters benefits.

Fund spokesperson Makhosonke Buthelezi said he cannot yet confirm how the UIF will prevent its funds from being depleted in the near future.

“The fund’s actuaries have been tasked to make an analysis of the financial health of the UIF and once done, they will make a presentation to Nedlac social partners. And from there, various options of Ters funding will be discussed,” Buthelezi said.

Recovered funds

On the flipside, the UIF has recovered R3.2 billion in Ters funds which were paid in error.

Buthelezi said some companies received overpayments worth billions of rands, with an estimated R1 billion paid to individuals who were not supposed to receive the payout.

“In all cases, employers realised that the fund had overpaid them, and returned the money.”

Buthelezi said that investigations are continuing, and some applicants who defrauded the fund have already been arrested.

“Currently investigations are still on-going, and we cannot tell at this stage what will be the outcomes of these fraudulent cases: whether they will result in convictions or (if) perpetrators will be ordered to pay the money back,” Buthelezi said.

Last week Friday the Hawks Serious Corruption Investigation team arrested a female company director in the Mtititi community, near Malamulele in Limpopo, who stole over R3.2 million from the Ters benefit for more than 242 workers whose contracts were terminated before the lockdown came into effect in March.

Nine other employers have been arrested due to fraudulent Ters claims, and more arrests are expected as 157 cases are currently being investigated.

Ninety of these companies apparently claimed for employees who don’t exist, or they claimed for workers who could do their work as per normal circumstances during the first phase of lockdown. Some claimed for employees who had left the company before the pandemic.

“It is not easy to tell when they will be wrapped up, as some of these cases are in the hands of law enforcement agencies,” Buthelezi said.

This article first appeared on Moneyweb and was republished with permission.

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