Covid benefit fraud: Employers tried to pocket R228 million, says Nxesi

Covid-19 became a backdoor to fraud risk and exposed the inadequate capacity of the state on many fronts, says Department of Employment and Labour Minister Thulas Nxesi.

Nxesi was speaking on Friday during a webinar while outlining a milestone and interventions to mitigate the worst effects of Covid-19 pandemic on the labour market in South Africa.

Nxesi said that payments of the Covid-19 Ters benefits by the UIF quickly became the target of fraud and corruption.

“The auditors verified payments of R16 billion and traced R228 million that was fraudulently claimed by employers. Of the 121 employers that have already been handed to the Hawks by the Presidential Fusion Centre, 16 have appeared in court,” Nxesi said.

“We are grateful to the office of the Auditor-General for their assistance in analysing systemic weaknesses requiring strengthened controls and to the SIU for investigating possible fraud and corruption.”

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“The pandemic also exposed the shortcomings of the UIF and our social security safety net – particularly with regard to the informal sector, atypical employees and the gig economy.”

Nxesi said about 297,000 compliance inspections will be conducted during 2021-22 with a continued commitment to prosecute noncompliant employers with the Basic Conditions of Employment Act and national minimum wage.

He said labour inspectors would work closely with the Commission for Conciliation, Mediation and Arbitration to enforce compliance with labour market policies and laws.