The Unemployment Insurance Fund (UIF) has undertaken to pay all valid claims which were not paid, as it begins to wind down the massive campaign of supporting workers through the worst effects of the Coronavirus pandemic.
UIF Commissioner Teboho Maruping said that so far, the Department of Employment and Labour entity has paid out R31 billion in 6 900 391 payments.
However, Maruping noted that, as the department tries to finalise payments that are still outstanding, it has become clear how “certain elements” tried to take advantage of the payments, through fraudulent means.
“For example, it has emerged that some companies tried to claim on behalf of people who are deceased or even with fraudulent or non-existent Identity Document (ID) numbers. 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,” Maruping said.
Over 4 000 claims lodged on behalf of deceased
Through the vetting, Maruping said, the department has been able to establish that there were at least over 4 000 claims, including 2 729 in April and 1 944 in May, which were lodged on behalf of deceased persons, and the thorough vetting that has been instituted has picked up all these anomalies.
He said they are following every cent that has been paid out and will continue processing valid claims, but warned that some of the claims cannot be processed for obvious reasons.
Maruping said close to 50 000 (48 189) invalid ID numbers were used in April and this figure decreased to 43 176 in May. In April, 106 488 ID numbers could not be found on any system, and this number went down to 84 278 in May.
Controls to prevent duplicate payments
He explained that the department developed the system in such a way that it would be able to talk to other public service institutions like SARS and the Department of Home Affairs.
Currently, he said, the UIF uses reference and ID numbers to prevent duplicate payments, as well as verification of banking details, password protection and checking claims against UIF and SARS databases.
“As we repurposed the Fund to deliver to laid-off workers, we also needed to build in the necessary financial controls and ensure the liquidity and long-term sustainability of the Fund itself.
“Minister had directed that there will be no payments made by the UIF until the necessary controls were in place, as ultimately they would later be required to account to all government authorities and the Auditor General on systems, processes and control of disbursing such huge amounts,” Maruping explained.
Over 280 000 recently paid on ufiling
Another reason that led to delays, included employees not registered with the UIF of which the Fund has to verify their existence with SARS.
In these cases, and realizing the noble cause for supporting workers, Maruping said they gave employers the chance to declare these workers through ufiling after which, they were able to pay.
As a result, he said, a total of 171 393 for April and 113 856 for May has recently been declared by employers on ufiling and they have either paid them or are in the process of doing so.
“The Unemployment Insurance Act makes it obligatory for a company to declare all its employees with the Fund and to pay over UIF contributions to the Fund and it has been in contact with these employers requiring them to confirm if indeed these are their employees including some form of proof – whether through their payroll or South African Revenue Service declaration,” Maruping noted.
However, he said that in some cases, the Fund has not received cooperation from employers which begged the question if those workers were really employed at the companies concerned or if some of the companies in question were trying their luck to see if UIF will pay.
“Unfortunately, the regulations were clear right from the beginning that a company or entity had to have been registered for UIF before the 15 March 2020 but in April, 18 648 claims were lodged and 3 052 in May. These cannot be processed,” Maruping said.
He said the April and May applications are closed, but the June applications are still active.
The extra vetting means that instead of paying in 24 hours, the minimum time now is 48 hours, Maruping noted.