R3m in Ters fraud exposed in Western Cape

A Western Cape company is under investigation for allegedly fraudulently claiming benefits from the Unemployment Insurance Fund’s (UIF) Covid-19 Temporary Employee/Employer Relief Scheme (Ters).

Ters payments were paid to staff when Covid-19 lockdown restrictions prevented their employers from operating fully.

Briefing the Western Cape Standing Committee on Finance, Economic Opportunities and Tourism, UIF acting commissioner Marsha Bronkhorst said the fraud was estimated to involve around R3 million.

Another two companies have since been identified for investigation.

ALSO READ: Report on Ters corruption shows the cracks in the system

One of the employers allegedly claimed an administration fee for paying over Ters funds, while another allegedly claimed for employees who were no longer working. Both cases have been handed over to the police for investigation.

The investigations form part of a post-verification process by seven auditing and accounting firms on behalf of the UIF.

To date, 45 employers have been verified and R250 000 has been recovered.

However, eight companies have refused to comply with the investigation, Bronkhorst said. The companies include two large clothing retailers and a well-known furniture company.

The cases will be handed over to the Special Investigative Unit immediately, Bronkhorst added.

“The UIF is of the opinion that if the companies had nothing to hide, they would cooperate with the investigation,” she added.

“The UIF is adamant that all employers will be audited.”

Claims of corruption have bedevilled the UIF, with anti-corruption organisation Corruption Watch releasing a report revealing mismanaged funds and cases in which companies pocketed funds and failed to pay them over to employees.

The Ters funding was paid to around 1.1 million workers in the Western Cape, with a total value of around R10.4 billion. Most of the employees who received funding were employed in sectors classed under personal services, which includes hospitality.

The Western Cape had the second-highest number of claims after Gauteng.

The fund paid more than R59 billion nationally.