Covid-19 TERS expected to start winding down operations

The Department of Employment and Labour Minster Thulas Nxesi has announced the department would begin winding down the Covid-19 Temporary Employer-Employee Relief Scheme (Covid-19 TERS). 

“As some level of normality has resumed this year, including a lot of economic activity, we are winding down and preparing to close Covid-19 TERS by paying all valid and remaining claims,” said Nxesi in a statement.

“In this regard, we urge employers to correct all errors on the Covid-19 TERS portal to enable us to disburse all outstanding monies and bring an end to the Scheme.”

The Fund will focus mainly on improving service delivery and providing social security (paying normal UIF benefits) to contributors and their beneficiaries for the 2022/2023 financial year.

The 26th of March 2022 marked the two-year anniversary since the Covid-19 TERS was established.

The Scheme was primarily formed to save jobs and ease the financial burden on businesses after the country was placed on the first hard lockdown from 26 March 2020 to 16 April 2020 to contain the spread of the coronavirus (Covid-19) pandemic. 

“It was important to introduce Covid-19 TERS to balance curbing the spread of the virus and keep South Africa’s economic wheels going,” Nxesi said.

UIF financial position

The minister also announced that the UIF is in ‘a sound financial position.’

According to Nxesi as the assets have increased from R115 billion to R124 billion by 31 December 2021, which will ensure future payments of normal benefit claims and administrative costs.

To date, the UIF has disbursed R64 billion to 5,7 million workers, surpassing our initial budget by R24 billion. 

Covid-19 TERS is by far one of the most effective monetary government interventions as it constituted 29% of the 41% stimulus package successfully disbursed by 31 March 2021. 

President Cyril Ramaphosa described Covid-19 TERS in one of his weekly newsletters as “a lifeline to struggling businesses and employees. 

“It (Covid-19 TERS) made the difference between companies remaining open and being forced to close, between jobs saved and jobs lost,” said the president.

UIF overhaul and irregular payments

The Fund added 290 call centre agents to help clients with UIF enquiries since our 125 labour centres were not open to the clients.

But the Auditor-General of South Africa (AGSA) report exposed some irregular payments and we learned with dismay that some employers were not paying over the monies to their workers.

“We implemented the recommendations of the AGSA, and cooperated with banks and other government departments to validate accounts and at least 5 million ID numbers to avoid fraudulent payments,” Nxesi explained.

July unrest

In July last year, the country experienced devastating civil unrest. 

Businesses and shops were looted in Gauteng and KwaZulu Natal with billions lost in damaged businesses and this resulted in approximately 32 934 workers facing retrenchments.

“UIF was called again to intervene to save potential job losses and this resulted in the launching of the Workers Affected By Unrest (WABU) relief scheme.” 

The purpose of WABU was primarily to protect those workers who suddenly found themselves with no place to work due to their workplaces being damaged.

“The relief worked along the COVID-19 TERS where employers applied on behalf of employees, however, this time around we ensured that the benefit is paid directly into the worker’s bank account to avoid delays and prevent the funds from being used as a business rescue for employers,” said Nxesi.

Currently, beneficiaries have been paid an amount of R14 148 118,29 in both Gauteng and KwaZulu-Natal. 

UIF continues to pay this benefit as and when complete and competent claims are received, and the claim has passed all checks with various institutions.

The UIF also created a fraud hotline number which conveyed information to our forensic auditors that conducted the “follow the money project” to account for every cent and rand paid through Covid-19 TERS. 

To date, the project has resulted in close to R900 million being returned to the UIF’s coffers with several arrests and convictions in courts. 

UIF Commissioner, Teboho Maruping is also back at work after being suspended.

Maruping was suspended along with the UIF’s chief financial officer, chief operating officer and head of supply chain management at the onset of the COVID-19 pandemic.

This was after the Auditor-General report flagged irregularities with the Covid-19 TERS processes.

Compiled by Narissa Subramoney

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