Business calls for urgent intervention after UIF-Ters benefits suspended

26 August 2020 - 09:10 By TimesLIVE
UIF applicants queue at the department of labour in Randburg to get financial relief during the Covid-19 pandemic. File image
UIF applicants queue at the department of labour in Randburg to get financial relief during the Covid-19 pandemic. File image
Image: Alaister Russell/The Sunday Times

Business4SA (B4SA) has expressed dismay at the temporary shutdown of unemployment relief funds, saying it has offered to help the labour department free of charge with capacity challenges impeding the payouts of lockdown aid.

All payments of Unemployment Insurance Fund (UIF) Temporary Employer/Employee Relief Scheme (Ters) benefits have been halted pending investigations by the auditor-general.

B4SA said: “It is understood the auditor-general is investigating system integrity problems at the UIF related to the Ters system.

“This comes as none of the already significantly delayed payments on claims for the July/August period, for which claims opened on August 17, have been made. The catching up on backlog payments going back as far as April have also been halted.”

While it supports the mitigation of fraud risks, and urges that criminal charges should be brought against all alleged perpetrators, B4SA said it remains unclear how long these processes will take to complete.

Halt is grossly unfair

“The unilateral halting of all payments is grossly unfair to all employees and their employers who have legitimate claims.

“That the UIF system is incapable of remedying the relatively small number of fraudulent claims without disadvantaging the millions of legitimate claimants is an indictment on the UIF system.

“The continued delays and lack of transparency from the UIF in regard to their capacity challenges has had the unintended consequence of creating mistrust between employers and employees. B4SA has been urging the UIF for some time to engage meaningful third party support.

“A team of B4SA members is lined up to provide assistance on a pro bono basis, but so far this offer has not been taken up. Urgent intervention is required.”

By mid-August, the UIF said it had paid out R40bn in Covid-19 Ters disbursements to ease the financial difficulties experienced by workers during the lockdown.

Nine-million payments were made through 779,429 companies that put in claims on behalf of employees.

The personal services industry has been the biggest beneficiary of the Ters payouts. with more than R10bn disbursed to benefit 2,620,115 employees. This industry includes boarding houses, cafes, restaurants, nightclubs, laundries and dry cleaning depots, barbers, beauty shops, funeral undertakings, crematoria, cemetery boards, advertising agents, and collection agencies.

The disbursements by the UIF, which is an agency of the employment and labour department, also saw R9bn pumped into the trade industry. This include market agents, fish, poultry and game dealers, installers and assemblers of computers, household electrical appliances, televisions and radios, armature winding, taxidermists, pedal cycle or sewing machine dealers (including repair and assembly), photographers, hide, skin and wool merchants and brokers, and makers of feather dusters. In this industry, 2,218,571 employees have benefited.

The building industry was third with just over R2bn disbursed to 496,981 employees, said the UIF.

The rest of the industries are: iron with R2bn, professional services with R1.9bn; air services with R1.3bn; and mining with R1.2bn. Industries like educational services, food and agriculture were just below the R1bn mark.

The UIF said in a statement on August 12  it would open and begin processing the July/August Covid-19 Ters benefits applications from August 17, after the signing of extended period of benefits by labour minister Thulas Nxesi.

This was to allow employers or employees to claim Covid-19 Ters benefits for the extension period starting from July 1 until August 15 for those whose employers are not permitted to commence operations under the Disaster Management Regulations; unable to make alternative arrangements for vulnerable workers, such as working from home; and unable to make use of their services because of operational requirements caused by compliance with the regulations such as rostering, staggering working hours, short time and the introduction of shift systems.

The cut-off date for the application window for April and May was set as September 15.

TimesLIVE