Eleven arrested in UIF COVID-19 benefit probe

Labour and Employment Minister, Thulas Nxesi, says 11 people have been arrested as the Special Investigating Unit (SIU) intensified its probe to nab those accused of benefiting from illegal UIF COVID-19 TERS payments.

Making a statement on Tuesday to the National Assembly on the illegal disbursements of the Unemployment Insurance Fund (UIF) COVID-19 benefit, Nxesi said following the probe by the Auditor-General, systems are being tightened at the UIF and headway is being made to root out corruption.

The AG is auditing a wide-ranging number of irregular payments and allegations that benefits were withheld from rightful beneficiaries.

“I would like to confirm that the UIF COVID-19 TERS [Temporary Employee Relief Scheme] benefit is implemented, as it was intended, to cushion employees who have been temporarily laid off, and the money of workers is managed and disbursed properly, as required.

“The Auditor-General findings have been acted on and are ongoing.

“Fraud and corruption are being dealt with decisively, and corruption is being rooted out,” said Nxesi.

The Auditor-General is currently auditing all payments made from April to June 2020. These new controls were fully implemented only on 21 September 2020.

Progress on the SIU investigation

Nxesi said the SIU’s investigation is aimed at identifying and charging individuals who benefited from illegal payments, and to recover the money.

“In some cases, bank accounts have been frozen and assets seized. People have been charged and arrested.”

Nxesi said R3.5 billion of wrongful payments have already been recouped.

He thanked the many honest and responsible employers who returned overpayments after realising a mistake had been made, where benefits were calculated on the basis of incorrect information.

“As I mentioned earlier, the UIF has also commenced its own programme to ‘Follow the Money’, tracking every payment made.

“Eight audit and forensic audit companies have been appointed nationally to fast-track the process.”

Nxesi said 157 cases have been allocated for investigation, falling into the following categories:

–       Employer withholding or underpaying employees’ benefits (38 cases).

–       Employer using incorrect UIF reference number (4 cases).

–       Overpayment of UIF benefits to employers (1 case).

–       Individuals’ claims blocking companies’ claims (10 cases).

–       Incorrect banking details (8 cases).

Nxesi said there are 90 cases of suspected fraudulent claims, including claiming on behalf of ghost employees, work and draw benefits (company claiming while it was fully functional), company claiming for terminated employees and the collusion between employer and employee to lodge fraudulent claims.

Nxesi said 67 cases have been finalised, with 90 cases still pending. He said three cases have been instituted by complainants, while the UIF has instituted 75 criminal cases. Out of these, 11 people have been arrested while 10 have already appeared before the court.