By Babalo Ndenze for EWN
The Special Investigating Unit (SIU) said one company owner used over 1 000 ID numbers to defraud the Unemployment Insurance Fund (UIF)’s temporary employment relief scheme (TERS) of over R100-million.
The SIU on Wednesday told Parliament’s finance watchdog Scopa that the UIF was the victim of fraud by companies and state employees.
SIU chief forensic investigator Johnny le Roux said a certain Mr Simbini, a private individual and sole director of a company called Impossible Services, submitted over 6,000 TERS claims for non-existent employees.
“According to the records, the only registered employee of Impossible Services was Simbini himself. There was, therefore, no other registered employees for Impossible Services that TERS money could be claimed for. The money was paid into the bank account of Impossible Services and at that stage, R110 million was preserved.”
Le Roux said phase one of the investigation focused on state employees who received a TERS benefit during COVID-19.
He said at least 6 000 employees were identified within 24 government departments with the assistance of the Department of Public Service and Administration.
The Eastern Cape had over 500 cases: “In the Eastern Cape, you would notice that there were at least 501 matters in eleven departments amounting to R106-million.”
The SIU said a number of officials had been charged and disciplined, while millions of rands had recovered.
By S’thembile Cele for News24
Employment and Labour Minister Thulas Nxesi has warned that the state-run Unemployment Insurance Fund could collapse if it is forced to again extend special benefits to workers who’ve lost income as a result of the coronavirus pandemic.
The government initially committed R40 billion from the fund, which is financed using workers’ monthly contributions, to subsidise the special benefits for three months. The relief, which was given to those whose employers couldn’t afford to pay them or who were forced to take leave, was subsequently extended by a further four months until mid-October. Almost R53 billion has been dispensed to more than 4.7 million people so far.
While there have been reports that the UIF has R140 billion available that could be used to further extend the so-called Temporary Employer-Employee Relief Scheme, much of the money is tied up in investments such as bonds, property and equities, and can’t be easily accessed, according to Nxesi. The fund will also need money to pay out regular unemployment claims to more than 1.5 million people in the near future, he said in an interview.
“If we blow this money on this temporary scheme, what will happen to the ordinary beneficiaries who have put their money into it?” he said. “We cannot collapse this fund.”
The Congress of South African Trade Unions earlier this month called for payments to workers in industries that remain adversely affected by virus-related curbs to be extended by a further two months. It noted that the fund has about R60 billion in liquid assets that could be utilized.
“It is far cheaper to invest in saving jobs and companies by extending TERS than to allow thousands of companies to close and retrench millions of workers,” Cosatu said. It conceded that the fund couldn’t provide ongoing support for workers, and called for “a combined package of relief in the form of stimulus, tax relief, and debt relief.”
Cosatu has been at loggerheads with the government over its decision to renege on a three-year pay deal agreed in 2018 by denying civil servants raises this year – a dispute that is now before the courts. The federation has also objected to plans to freeze state workers’ pay for the next three years – a measure the National Treasury has said is necessary to bring burgeoning state debt under control.
Nxesi, whose department oversees the protection of labuor rights, said he is closely monitoring negotiations with the unions, which are handled by the Department of Public Service and Administration.
“My view is that there is a need for a social compact across government to say how are we going to deal with the issue of a salary increment versus the job losses we are seeing,” he said.
The minister also said his department is busy drafting a national employment policy that will aim at dealing with an influx of undocumented foreign nationals, some of whom are exploited by local employers.
“We are looking at the sectors where we can implement quotas for local workers” to be employed as well as safeguard the rights of foreign workers who are legally in the country, he said.
Source: Creamer Media’s Engineering News
The Unemployment Insurance Fund (UIF) will open and start processing the latest and last round of Covid-19 Temporary Employer/Employee Relief Scheme (TERS) applications from Monday, November 23.
Applications will close at the end of December.
This follows the announcement by President Cyril Ramaphosa that the TERS benefits would be extended by another month to October 15.
The TERS was established to assist employees who lost income owing to the coronavirus and the regulations limiting economic activity during the various levels of the lockdown.
Since March, just over R52-billion has been disbursed in 11.5-million payments through more than one-million employers.
By Jason Felix for News24
The Unemployment Insurance Fund (UIF) is not a “money tree” with unlimited resources.
That was the warning from Employment and Labour Minister Thulas Nxesi, who revealed on Tuesday that the UIF has around R50-billion available.
Nxesi delivered a ministerial briefing in the National Council of Provinces (NCOP) on the measures his department has taken to mitigate the Covid-19 pandemic.
Through the Covid-19 Temporary Employee Relief Scheme (TERS), over R49-billion had been disbursed in benefits in the form of over 11-million payments since the beginning of the lockdown.
Nxesi said R23-billion was disbursed in Gauteng, in five million payments, and R484-million was disbursed in the Northern Cape, in over 100 000 payments.
At the same time, R7.5-billion was disbursed in 1.3 million payments in normal UIF benefits.
Nxesi said plans were afoot to ensure the sustainability of the UIF fund.
“We have about R50-billion available. The question we need to answer now is what is the way forward when we have to deal with mass unemployment? This is a serious matter that the UIF board is looking at.
“It is difficult at this stage to determine all the retrenchments. But if the worst comes to the worst, we might see ourselves in the 2008 situation, where we would have to appeal to government,” he said.
Nxesi said, while the UIF was repurposed, it also needed to build in the necessary financial controls.
“I said at the time, ‘we don’t start paying out benefits before controls are in place’.
“This led to initial delays, and complaints from employers that the conditions were too onerous – which, in turn, compromised UIF controls in the rush to get payments out to laid-off workers,” he said.
He also said the UIF was aware of the fraud risks with TERS payments.
In September, all Covid-19 TERS payments were put on hold after several allegations of corruption and complaints that employees were not receiving their monies.
Stopping the payments allowed the UIF to implement adequate controls and to mitigate the identified risks.
During the first payment run on 21 September, and after the suspension of the TERS payments, errors were detected and the payments were rejected.
Some of these included the rejection of 193 applications after it was found the applicants were deceased persons.
Nxesi said 1 688 government employees, who applied for TERS were rejected. Also rejected were two applications from inmates and 1 968 applicants with invalid identification numbers.
“The holes are being plugged. The UIF has received the correct master data from the Department of Home Affairs, which is the latest data, so no deceased employee will be paid.
“The risk of inflated salaries by employers has also been corrected as the UIF now verifies with the latest declared salary.
“All under-age ID numbers have been blocked on the system,” he said.
Source: Business Insider SA
The Unemployment Insurance Fund (UIF) is still not paying out special coronavirus grants as it tries to verify the identity documents of those who applied over recent months.
The delay has resulted in new cut-off dates for applications for the so-called Temporary Employer/Employee Relief Scheme (TERS):
The final deadline for TERS applications for March to May 2020 is September 25.
TERS applications for June close on October 15.
TERS applications for July to September 15 close on October 30.
The UIF’s process to pay out the TERS grants has been marred with irregularities.
In a new report, the auditor-general outlined various problems it found with the TERS system, including that the UIF did not sufficiently corroborate information it received from applicants.
This resulted in fraudulent payments, which included:
- Almost R696 million was paid to foreigners who have not made UIF contributions in the past 12 months
- More than 50 children under the age of 15 received payments
- More than R440 000 was paid out to the accounts of dead people
- Almost R170 000 was paid to prisoners
- More than R30-million was paid to people with invalid identity numbers
- It also found that there was “double dipping” of more than R140 million – thousands of people who already get state grants, including students and disability grant recipients also received TERS payments.
- The AG report resulted in the suspension of top UIF executives, including its commissioner Teboho Maruping.
The UIF took the TERS platform offline over the past weekend to implement changes to its systems, as recommended by the AG. The system was supposed to be restored by Monday, but by Tuesday it was still down.
“Currently payments are still on hold as the [UIF] is still working with the Department of Home Affairs and other government databases to verify about 5 million identity documents of Covid-19 TERS applications. This is done to ensure that payments are made to deserving and authentic workers,” said Marsha Bronkhorst, acting UIF Commissioner, in a statement.
“We are aware of the negative impact this delay has caused and is causing. But in the interests of mitigating the risks which have been identified both by our Risk Unit and the Auditor General, we unfortunately have to pause payments,” she added.
In total, the UIF has paid out almost R42-billion in 9.5-million payments to workers.
From July, claims will only cover employees whose employers are:
- not permitted to commence operations under lockdown regulations
- unable to make alternative arrangements for vulnerable workers (those above the age of 60 years, or with co-morbidities), such as working from home
- unable to make use of their services because of the coronavirus restrictions, for example on how many employees can be in the workplace at the same time.
The Department of Employment and Labour has suspended all TERS payments that are currently outstanding.
The Department has identified a number of anomalies in respect of past payments made to persons who are deceased, imprisoned or minor.
The Department will be comparing its database with that of the Department of Home Affairs in order to rectify this situation going forward.
It is unclear for how long payments will be suspended.
Cash-strapped employees struggled to apply for TERS benefits in July, amid a series of hiccups within the system.
Moneyweb previously reported that applications for May opened late, as well as June applications, which were closed shortly after due to security breaches. The system only came back online in the second weekend of July.
The South African government has decided to extend the Covid-19 Temporary Employee Relief Scheme (TERS) benefits to 15 August 2020.
The benefit was initially meant to run until the end of June.
Last week, in an attempt to stop the fraud that has been taking place from the Unemployment Insurance Fund’s relief scheme, the fund has introduced new and more stringent controls to verify banking details.
According to the Department of Employment and Labour, because of the introduction of the new safety measures, the fund has had to delay payments.
The department said in a statement that over the weekend it had resumed payments and disbursed R372 million of Covid-19 TERS benefit claims.
“The payment covered claims for April and May lodged by 15 866 employers benefiting 78 283 employees for whose banking details passed the verification process. Further payments were done today (July 14) with about R295m paid out from 1 824 employers benefiting 76 078 workers. This brings the total paid to date since April 16 to just under R30 billion (R 29 726 359 618.48) covering 6 789 695 workers from 539 953 employers,” the department said.
The South African government has decided to extend the Covid-19 Temporary Employee Relief Scheme (TERS) benefits to 15 August 2020.
As part of the new control measures, the fund has also introduced a new rule to the system that requires applicants to insert either the Enterprise number (CK/CIPC) or the ID number of the bank account holder in the TERS online portal in order to further verify banking details against the authorised claimant.
By Jan Vermeulen for MyBroadband
The Unemployment Insurance Fund (UIF) has made changes to the website for its Temporary Employer-Employee Relief Scheme (TERS) after a security researcher reported a data leak.
This leak allowed anyone to obtain the UIF reference numbers of employers who had been paid out, and look up how much they had been paid.
UIF reference numbers were published as part of a list of paid employers on a website hosted under the Department of Employment and Labour’s domain.
This list of paid employers can still be downloaded in CSV format from the UIF website, but it no longer includes UIF reference numbers.
After MyBroadband and the security researcher reported the issue, the UIF reference numbers were removed from the downloadable list.
Armed with a list of UIF reference numbers, an attacker could go to the “My Payment Status” page and query the reference number.
While this page now features a Captcha, it did not have one a few weeks ago. The Captcha was only added after we raised the matter with the UIF.
Before the Captcha was implemented, it would have been simple for an attacker to write a script to extract the amounts paid and processing dates for each of the UIF reference numbers that were readily downloadable from the same website.
It is also still possible to look up the payment status and amount paid for anyone so long as you have their UIF reference number, or ID number.
The UIF does not require that you register an account or log in to look up this information.
Screenshots of the information returned by the My Payment Status page are included below.
MyBroadband contacted the Ministry of Labour for comment and was directed to speak directly to representatives of the UIF.
The UIF did not respond to a request for comment.
Although the South African government has put a number of relief measures in place to help those adversely affected by the Covid-19 lockdown, the structures seem to be overwhelmed or not functioning at all.
The week before last, it was reported that not one of the channels for the application to the Covid-19 Social Relief of Distress (SRD) grant of R350 was functional. More than 4,9-million people have applied for the new grant but on Friday 22 May SASSA’s CEO, Busisiwe Memela-Khambula, confirmed that just ten people had been paid.
The TERS UIF application process caused headaches for many business owners in April. However, applications for the month of May have still not been opened, and the following message is displayed on the website:
A business contacted My Office News with the information that they had received an e-mail stating that:
Companies that are no longer in full lockdown from 1 May cannot apply for this relief fund. This option is only available if your company is still in full lockdown with no operations taking place.
This means that, although many companies will need financial assistance due to a lost of customers or rule changes during Level 4, they will not be able to access it.
The Reserve Bank partnered with National Treasury and large private banks to launch a R200-billion loan guarantee scheme, which aimed to extend loans to businesses with an annual turnover of less than R300-million for operational expenses.
However, businesses have to apply within a number of metrics set forth by the bank in question, and many are finding that the other available relief funds such as SAFT do not cover the salaries of employers, only employees.