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AG Report on COVID-19 TERS Benefits Under the Spotlight

September 4, 2020

Department of Employment and Labour

The Auditor-General’s (AG) report into payment of UIF Coronavirus Covid-19 Temporary Employer/Employee Relief Scheme (TERS) benefits points to numerous gaps, risks and inadequate controls and verification processes.

The employment and labour department indicated that this has “resulted in illegal payments, amongst others, to recipients of other state grants, students receiving NSFAS payments, public servants, and even inmates, deceased persons and minors”.

In a statement, the department added that evidence of overpayments (and underpayments) as well as inflated claims has also been uncovered.

Responding to the report, the employment and labour minister, Thulas Nxesi, declared that the department and the Unemployment Insurance Fund (UIF) were already, in line with an AG recommendation, collaborating with other state organs and law enforcement to investigate every illegal action and risk identified.

The minister also pointed out that national treasury has been “requested to deploy technical resources to the UIF to urgently implement the recommendations of the AG and to develop systems solutions to identified gaps and risks”.

The department also plans to appoint service providers to conduct a forensic investigation into the overall workings of the UIF, including Compensation funding.

The minister has also suspended the UIF Commissioner.

“In similar fashion, the Director-General of the Department of Employment and Labour has suspended UIF senior management: the CFO, COO and Head of the Supply Chain. These moves allow for the SIU to conclude its forensic investigation, completely unfettered.”

The minister confirmed that the complete audit of all Covid-19 TERS benefit payments, agreed with social partners at Nedlac, commences this month.

Meanwhile, in another statement, the department announced an increase in Coronavirus COVID-19 claims in the mining/iron and steel industries.

“A total of 5986 claims have been lodged with the Compensation Fund (CF) for Covid-19 sickness contracted while at work. Of that number, 3782 claims have been submitted directly to the Compensation Fund and a further 2009 to Rand Mutual while Federated Employees have received 195 claims.”

Rand Mutual that covers workers in the mining and iron and steel industries has seen a sharp rise and has paid out R3.3-million in dependant benefits while the CF has paid R419 182.85 in medical aid claims.