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Eleven suspects arrested for UIF benefit fraud

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Labour and Employment Minister, Thulas Nxesi, said in a statement on Tuesday that 11 suspects have so far been arrested for benefiting from illegal UIF Covid-19 TERS payments.

This comes after the Special Investigating Unit (SIU) intensified its probe to nab those involved.

Nxesi addressed the National Assembly on the illegal payments of the Unemployment Insurance Fund (UIF) Covid-19 benefit.

He said that, following the probe by the Auditor-General (AG), systems are being tightened and progress is being made to root out corruption. 

The AG said that it is looking into a broad number of irregular payments along with allegations that benefits were withheld from its rightful beneficiaries. 

“I would like to confirm that the UIF Covid-19 TERS [Temporary Employee Relief Scheme] benefit is implemented, as it was intended, to cushion employees who have been temporarily laid off, and the money of workers is managed and disbursed properly, as required. 

“The Auditor-General findings have been acted on and are ongoing. 

“Fraud and corruption are being dealt with decisively, and corruption is being rooted out,” said Nxesi. 

The Auditor-General is in the process of auditing payments made from April to June 2020 as the new controls were only put in place on the 21st of September. 

Progress on the SIU investigation 

The minister added that the SIU’s investigation will identify those who benefited from these illegal payments, recover the money, and bring them to book. 

“In some cases, bank accounts have been frozen and assets seized. People have been charged and arrested.” 

Nxesi said R3.5 billion in wrongful payments have already been recovered and thanked honest employers who came forward to return overpayments where benefits were calculated on the basis of incorrect information. 

“As I mentioned earlier, the UIF has also commenced its own programme to ‘Follow the Money’, tracking every payment made. 

“Eight audit and forensic audit companies have been appointed nationally to fast-track the process.” 

The minister said that another 157 cases have been flagged for investigation. These cases fall into the following categories:

  • Employer withholding or underpaying employees’ benefits (38 cases).
  • An employer using incorrect UIF reference number (4 cases).
  • Overpayment of UIF benefits to employers (1 case).
  • Individuals’ claims blocking companies’ claims (10 cases).
  • Incorrect banking details (8 cases). 

While 67 cases have already been finalised, another 90 cases of suspected fraud are still being investigated - these include claims made on behalf of ‘ghost employees’, work and draw benefits (companies claiming benefits while it was still in business), companies submitting claims for terminated employees, and the collaboration between employer and employee to lodge fraudulent claims that must still be investigated.

He said three cases were reported by complainants, while the UIF has instituted another 75 criminal cases. Out of these, 11 people have been arrested while 10 have already appeared before the court.

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