Govt vows UIF payments will resume 'soon' after halt for probe

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Minister of Employment and Labour Thulas Nxesi during a media briefing.
Minister of Employment and Labour Thulas Nxesi during a media briefing.
  • The Unemployment Insurance Fund halted coronavirus payouts to workers earlier this week as its systems were probed. 
  • Minister of Employment and Labour Thulas Nxesi on Wednesday said the Auditor General's audit of Temporary Employer/Employee Relief Scheme (TERS) payments was to strengthen financial controls. 
  • Employment and Labour Director General, Thobile Lamati, says the payments will resume soon. 

Minister of Employment and Labour Thulas Nxesi has said the Unemployment Insurance Fund (UIF) will soon resume its Temporary Employer/Employee Relief Scheme (TERS) payouts. 

Nxesi was briefing Parliament's oversight committee on employment and labour on Wednesday morning. 

This comes as it emerged that Auditor-General Kimi Makwetu had conducted a preliminary audit of the payments of TERS benefit funds to companies as a form of relief from the economic impact of the Covid-19 pandemic.

As a result of the probe, the Unemployment Insurance Fund had to halt payments to workers, as Business Insider reported. 

Early in the meeting on Wednesday, Deputy Minister of Employment and Labour Boitumelo Moloi acknowledged that the system was dogged by challenges including overpayments, underpayments, fraudulent activities, and delays. Moloi said the problems were being addressed. 

Democratic Alliance MP, Michael Bagraim, asked the UIF delegation what progress they had made in investigating the "transgressions" in the payment system, and who was responsible. 

"We know the AG closed down the UIF payments completely," said Bagraim. "We also know that it’s because they believe it's because of past transgressions. Is this also because of fraud now, and who has been suspended as a result of these transgressions?" 

Nxesi, in reply, said the Auditor-General's audit of the TERS payments was part of a process of strengthening financial controls following a request by President Cyril Ramaphosa.

"We also invited officials to invite the AG to perform an interim audit. We have already engaged the AG on this interim audit of TERS benefit payments. He has made preliminary observations and his final findings will be in the final report," said Nxesi.

Nxesi said the TERS relief scheme had paid out more than R40 billion to some 9 million employees since the beginning of the national lockdown.

Business interest lobby group, Business 4 South Africa, earlier on Wednesday said halting payments was "disappointing". 

"None of the already significantly delayed payments on claims for the July and August period, for which claims opened only on 17 August, have been made. And the catching up on backlog payments going back as far as April have also been halted," it said in a statement.

Employment and Labour Director General, Thobile Lamati, told the committee there was no indefinite halt to the disbursement of funds through TERS, adding it was common for the scheme to put payments on ice when weaknesses were detected. 

"The AG never stopped UIF payments. During the course of the disbursement of TERS benefits, whenever we picked up control weaknesses, we would delay payment, address deficiencies and then continue payment," said Lamati.

Without giving a definitive timeframe, Lamati said the payments would to resume soon. Authorisation for the payments to resume was issued on Tuesday.

"The instruction to resume payment was issued yesterday by the commissioner so payment is being processed as we speak. There are many questions on controls. The AG provides recommendations and we are indeed acting on those recommendations," Lamati said.

Lamati said the department was working with Government Tactical Advisory Centre at National Treasury to improve data analytics and ensure that the system pays the right people in the right amount.

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