South Africa’s Temporary Employee/Employer Relief Scheme has been halted, pending an investigation by the auditor-general.
They aim of the scheme is to provide much needed support for businesses impacted by the country’s lockdown. Employees of companies who were forced to close their operations as a direct result of the Covid -19 pandemic have been able to qualify for a government benefit.
“It is with deep disappointment that B4SA has learned from its representatives at Nedlac that all payments of Unemployment Insurance Fund (UIF) Temporary Employer/Employee Relief Scheme (TERS) benefits have been halted pending investigations by the auditor-general,” Business for SA (B4SA) said in a statement on Wednesday (26 August).
It is understood that the auditor-general is investigating system integrity problems at the UIF related to the TERS system.
None of the already significantly delayed payments on claims for the July/August period, for which claims opened only on 17 August, have been made, B4SA said. And the catching up on backlog payments going back as far as April have also been halted, it said.
“B4SA strongly supports the mitigation of fraud risks and urges that criminal charges should be brought against all alleged perpetrators. However, the unilateral halting of all payments, and the very poor communication of the situation by the UIF leadership, is grossly unfair to all employees and their employers who have legitimate claims.
“That the UIF system is incapable of remedying the relatively small number of fraudulent claims without disadvantaging the millions of legitimate claimants is an indictment on the UIF system.”
It said that measures have been put in place to mitigate risk and assess and improve data integrity. It remains unclear how long these processes will take to complete.
“We know that the Ters scheme has been serially defrauded, including one well-known case in which a single individual received and laundered R5.7 million intended for 1,400 workers,” said Democratic Alliance MP, Michael Cardo.
“The latest developments suggest that this case was just the tip of the iceberg. Payments would only have been suspended, following the auditor-general’s findings, if there was a justifiable belief that instances of fraud and corruption associated with the Ters scheme are deep-seated and widespread at the UIF.”
The DA said that labour minister, Thulas Nxesi must 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.
“Above all, minister Nxesi must communicate with anxious workers when they can expect Ters payments to recommence,” Cardo said.