Picture: Henk Kruger/African News Agency (ANA) Archives
Picture: Henk Kruger/African News Agency (ANA) Archives

Covid-19 Ters: A lifeline to struggling businesses and workers during the pandemic

By Opinion Time of article published Oct 15, 2021

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Advocate Mzie Yawa

It has been over a year since the first Coronavirus (Covid-19) case was confirmed in South Africa. Since then, the unseen enemy has taken the precious lives of over 80 000 people in South Africa and caused immeasurable havoc, as many workers, including breadwinners, lost their income and jobs, leaving many families in financial distress.

When the country subsequently went into full lockdown to curb the spread of the Covid-19 virus in March 2020, President Ramaphosa announced a financial relief package to mitigate the negative impact of the lockdown on the economy. The relief package included, among others, the Unemployment Insurance Fund’s Temporary Employer-Employee Relief Scheme (Covid-19 Ters) announced by Minister Thulas Nxesi on 26 March 2020.

The Covid-19 Ters benefit was established to save jobs and ease the financial burden on businesses, and most importantly, their vulnerable workers who lost income during the lockdown, and indeed, it provided a lifeline to 267 000 employers and 5.4 million workers.

The challenge called for the complete re-purposing of the UIF to meet a new mandate, and on a trot, new policies and directions had to be developed to meet the expectation. There had to be changes to processes, procedures and systems without a play book for this scale of operation.

To enhance capacity and service delivery, the Fund also added 290 Call Centre Agents to help clients with enquiries.

Prior to the lockdown, the claim process was typically initiated by individual walk-ins to Labour Centres. This all had to be changed, as employers are the initiators of claims for Covid-19 Ters. At the same time, we engaged with business and labour at the National Economic Development and Labour Council (NEDLAC) to make possible bulk disbursements of benefits via employers and bargaining councils.

We needed to rapidly put in place policies and directions, which would guide the UIF and beneficiaries to access this benefit. All these directions and the amendments were developed through NEDLAC, with the social partners and presented to NATJOC and Cabinet.

There was a ten-fold increase in payments targeting partially employed and unemployed UIF beneficiaries. By March 2020, the UIF had paid R7.2 billion in unemployment benefits. However, for a period of 12 months, between April 2020 and March 2021, more than R58 billion in wage support was provided from the Covid-19 Ters intervention to more than 267 000 employers and 5.4 million workers.

Approximately R63 billion has been paid to date, and this is the biggest amount that has been disbursed by government to workers during the Coronavirus lockdowns. The initial budget was R40 billion, and the payments have gone a long way towards assisting companies to stay afloat and workers to put food on the table and meet their financial obligations.

Several companies, such as Cova Advisory and Nicholas Ngwenya Incorporated Attorneys, have publicly testified that Covid-19 Ters payments assisted them and their clients stay afloat, avoid retrenchments and helped their workers through financial difficulty.

While the good work continued, we received, with concern, grievances that employers did not pay over the money to their workers. Corruption in our country is a cancer that needs to be burnt out of existence using all the tools we have at our disposal. It is anti-development. It denies the poor of services, or at worst, it increases the price of services out of the league of those who live a day to day existence and is denying a generation of opportunities.

The UIF subsequently launched the fraud hotline platform to report any UIF fraud. The Fund also appointed forensic auditing firms to verify all payments, and where wrongdoing is found, legal action is instituted against delinquent employers. The Special Investigative Unit (SIU) continues to investigate individuals who benefited from illegal payments and have recovered the money. In some cases, bank accounts have been frozen and assets seized.

At least 18 suspects have been apprehended and appeared in various courts around the country for allegedly fleecing the UIF’s Covid-19 Ters Scheme. We also warn workers and companies who submit fraudulent claims that it is a criminal act that will be prosecuted to the fullest extent of the law.

The ‘follow the money strategy’ was also developed to audit all employers who have been paid these monies. Forensic audits of employers who benefited financially from the Covid-19 Ters led to the recovery of close to R900 million to the UIF’s coffers.

And while there were technical and other glitches along the way, these were speedily resolved. The UIF has taken immediate steps to address the Auditor-General’s (AG) findings and recommendations by cooperating with banks and other government departments to validate accounts and at least 5 million ID numbers to avoid fraudulent payments.

System controls have been implemented, including verification of salaries submitted, blocking all UIF employees’ ID numbers from applying, developing a system rule for benefit amount threshold block and to produce daily error reports. All underage ID numbers have been blocked on the system.

The Fund continuously re-process claims that are already in the system so that those that have been corrected and have passed validations can be paid when payment re-runs are conducted. That has resulted in the reduction of about 5000 outstanding claims for the period between April and October 2020.

We are confident, working with NEDLAC social partners, we shall meet our target of having these at zero by the end of December 2021.

Covid-19 Ters was made possible by the accumulated contributions of workers and the Public Investment Corporation’s (PIC) investment management, which have seen the UIF grow from R53 billion in 2011 to R151 billion before the introduction of the Covid-19 Ters benefit.

The UIF portfolio, the PIC’s second-largest client with 5% of Assets Under Management, declined by 24% from R151 billion to R115 billion due to Covid-19 Ters payments.

* Advocate Mzie Yawa is the acting UIF Commissioner

** The views expressed here are not necessarily those of IOL.

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