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Thousands of bogus claims and 'double-dipping' slow UIF payouts

More than 4,000 Ters claims made on behalf of dead people: labour department

20 July 2020 - 16:42 By Nonkululeko Njilo
Tens of thousands of invalid or fraudulent UIF applications have been lodged, the employment and labour department said on Monday.
Tens of thousands of invalid or fraudulent UIF applications have been lodged, the employment and labour department said on Monday.
Image: Leon Swart/123rf.com

More than 4,000 Covid-19 related UIF claims were made on behalf of people who had died, about 90,000 were made with invalid ID numbers and close to 200,000 made with ID numbers couldn't be found on any government system.

This is according to the employment and labour department, which said on Monday that it had been inundated with fraudulent claims made with the Covid-19 related temporary employer/employee relief scheme (Ters).

This, the department said, had resulted in delayed payouts - but it promised that all valid claims would be paid.

“Through vetting, we have been able to establish that there were at least 4,000 claims - April (2,729) and May (1,944) - were lodged on behalf of deceased persons, and the thorough vetting that has been instituted has picked up all these anomalies,” said UIF commissioner Teboho Maruping.

“We are following every cent that we have paid out and will continue processing valid claims, but some of these claims cannot be processed for obvious reasons.”

The department said it paid out R31bn in 6,900,391 payments to date.

However, the department said it was clear than some companies and individuals were trying to take advantage of the system. This means it had to "process each claim with caution", resulting in delayed payments for those who were following the rules.

“We have been assailed in certain quarters – sometimes deservedly so – for not paying on time, but in reality we have had to ensure that the system is not taken advantage of,” said Maruping.

“We understand the frustration that some people may have experienced, but given all the permutations, it has been absolutely imperative that we ensure that we disburse the funds to deserving people.

“Besides claims lodged for the dead, it has become clear as well that some of the identity numbers used to apply for some of the workers do not exist. There were close to 50,000 (48,189) invalid ID numbers used in April and this figure was slightly down to 43,176 in May.

“There were also ID numbers that could not be found on any system. In April, they were 106,488 such claims, and 84,278 in May.”

The system kicked these claims out immediately, said the department.

Some of the delays were caused by the fact that some employees had not been registered with the UIF, which then had to "verify their existence" with Sars. In April there 218,548 such cases and 102,397 in May.

“In these cases, and realising the noble cause for supporting workers, we gave employers the chance to declare these workers through uFiling, after which we would be able to pay. As a result, a total of 171,393 for April and 113,856 for May has recently been declared by employers on uFiling, and we have either paid them or are in the process to do so,” said Maruping.

He said it was compulsory for companies to declare all employees with the fund and to pay over UIF contributions according to the Unemployment Insurance Act, but this had not been the case with some.

“We have bent over backwards by even advising these companies on how to declare their employees if indeed they work for them. Again, on realising that the employees are not on the system, we have gone back to them to ask them to declare these workers and this is the outstanding information,” he said. 

The department said it had stated that companies or entities had to have been registered for UIF before March 15, but in April it received 18,648 claims and 3,052 in May - all of which could not be processed.

One of the regulations was that those who already have active UIF cases, either receiving benefits for maternity or unemployment, would not be eligible to Ters relief, but the UIF still received 21,601 claims of these claims and 12,641 in May.

“We could not and still cannot pay in the cases of double-dipping and we made this very clear at the beginning. The Covid-19 benefits necessitated not only new policies and directions, but also a major system change to cope with a tenfold increase in benefit payments,” said Maruping.  

“Prior to the lockdown, the UIF paid benefits only to retrenched workers who had contributed to the fund. The process was typically initiated by individual walk-ins to labour centres. This all had to be changed.”

The department added that the fund would continue to process claims that are in the system. The April and May applications are closed but the June applications are still active.