Written by: Steven Swart, MP and Whip
Article Source: ACDP Speech
ACDP Speech in response to the Minister of Employment and Labour on disbursement of Unemployment Insurance Fund:
“Chairperson,
The ACDP welcomes yesterday’s statement during which the Minister has set out the dire situation with the TERS payments (Unemployment Insurance Fund’s (UIF’s) Covid-19 Temporary Employer-Employee Relief Scheme). It is however deeply concerning that the fund, set up to assist workers in need, has been plagued with incompetency, fraud and corruption, particularly at a time when millions were dependent on these payments to survive after thousands of businesses closed their doors during the hard lockdown. This is not only concerning, but disgraceful.
The inaccurate and misrepresented data captured on the UIF portals, fuelled by the damning report by the Auditor General, have only added to the frustrations of all involved. The numerous cases of non-partial and incorrect payments have led to employers and employees losing all trust and patience with the UIF TERS system.
No worker can afford to wait up to 5 months for payments due and owing by the fund. They and their families are dependent on these payments. It is inhumane to deny or delay these much-needed payments.
We in the ACDP, like most MPs, I’m sure, have been inundated with complaints regarding TERS payments. This is unacceptable, given that employers have conscientiously paid over UIF contributions.
In addition, the Auditor-General outlined in a report last month the level of fraud and corruption with TERS payments. We understand that some ninety companies apparently claimed for employees who don’t exist, or they claimed for workers who could do their work as per normal circumstances during the first phase of lockdown. Some claimed for employees who had left the company before the pandemic. Payments were also made to dead people, children, prisoners as well as foreigners who had not made contributions to the fund for 12 months.
This has resulted in billions of rands going down the drain. This is absolutely scandalous given the financial constraints facing the nation, and the fact that the fund is running out of money to pay benefits. It has, together with other Covid19 related corruption, resulted in unprecedented public outrage. Swift action has understandably been demanded.
I would think this is probably also the tip of the iceberg. Understandably, this has resulted in additional verification steps being implemented. However, this should not delay payments to those who are desperate for the TERS payments to survive.
Last week Friday the Hawks Serious Corruption Investigation team arrested a female company director in the Mtititi community, near Malamulele in Limpopo, who stole over R3.2 million from the TERS benefit for more than 242 workers whose contracts were terminated before the lockdown came into effect in March. Nine other employers have been arrested due to fraudulent TERS claims, and more arrests are expected as 157 cases are currently being investigated.
The UIF has commendably recovered R3.2 billion in TERS funds which were paid in error. Many companies received overpayments worth billions of rands, with an estimated R1 billion paid to individuals who were not supposed to receive the pay-out. In certain cases, employers realised that the fund had overpaid them, and returned the money. Investigations are continuing, and some arrests have taken place – too few in our view.
The ACDP looks forward to the speedy payment of claims to deserving workers, as well as more arrests and the recovery of ill-gotten gains from those who have defrauded the TERS system. We are encouraged by the early freezing of bank accounts that took place. Clearly much more needs to be done in this regard.
We also look forward to being briefed as to how the UIF will fulfil its mandate in future as the Covid-19-induced economic crisis deepens.
We understand that the fund’s actuaries have been tasked to make an analysis of the financial health of the UIF. This adds to the urgency of dealing decisively with fraud and corruption in TERS payments.
I thank you.”
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Date published: 21/10/2020
Feature image: unsplash.com
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