UIF Commissioner Teboho Maruping
TThe Department of Labour has so far recovered R2.5 billion from employers who fraudulently claimed COVID-19 Temporary and Employee Relief Scheme (TERS) benefits and continues to audit companies in this regard.
Sumisoh Nkosi, deputy director in Unemployment Insurance Fund (UIF) Commissioner Teboho Malping's office, on Tuesday highlighted the findings of the department's “Follow the Money” project, which aimed to verify the R62.3 billion in TERS benefits distributed in 2020 and 2021.
Nkosi said the aim of the project is to ensure that funds reach the intended beneficiaries in a timely manner and are not misused or misused by employers. The ministry has engaged 27 companies to complete the verification process.
He said the department had so far verified R34.7 billion in payments, of which R2.5 billion in fraudulent payments had been recovered. Most of the cases were in Gauteng, Limpopo, Mpumalanga and KwaZulu-Natal, followed by the Eastern Cape, Free State and Western Cape.
Among the invalid claims uncovered during the audit were cases where employers deducted UIF fees from TERS funds, cases where employers told workers they were giving the funds as a simple loan, and cases where staff were paid less than they should have been.
In one case, a company purportedly based in the Free State province used identity card numbers of people who were not employees to make claims and defrauded authorities of R1,770,249, Nkosi said.
“The company had never traded before the lockdown and was based in the Free State province. The 'employees' they applied for are in KwaZulu-Natal but when we spoke to them they said they had never been to the Free State province,” he told an employers' seminar in Umhlanga.
In another case, the director of a company where an employee had last worked in 1980 resigned shortly after receiving R2,923,481.38 in TERS funds. A cafe with just three employees recruited 306 staff and was paid a total of R3,706,848.98. In the third case, a resident claimed R582,000.40 from a local business that did not exist and was never registered with the Companies and Intellectual Property Commission.
Elsewhere, employers collected identity card numbers and claimed R1,933,690.25, then signed debt acknowledgements for the full amount they received after the matter was investigated. Another employer, in collusion with a labour broker and a Zimbabwean national, claimed R14,033,858.39 for fictitious employees and signed debt acknowledgements.
Nkosi said 16 people had been convicted of TERS-related fraud, theft and money laundering offences, which carry penalties ranging from suspended prison sentences to 20 years' imprisonment.
All businesses whose benefit payments were directly deposited into bank accounts to pay funds to employees will be investigated for possible fraud, he added.
“We are a zero tolerance department for fraud. Our recovery methods are different and when we trace the funds that have been fraudulently acquired, they are sent to the fusion centre,” Nkosi said.
The centre is the government's anti-corruption team, established in 2020, and is made up of the National Prosecuting Authority, the Directorate for Priority Crimes (Hawks), the South African Police Service and the Asset Confiscation Unit.
Nkosi said company assets such as vehicles and cars purchased with ill-gotten funds would be seized by the state and sold to recover the funds and perpetrators would be criminally prosecuted.
He advised employers who realised they had not complied with the law on TERS payments to admit this up front to auditors, resolve the issue and close the case.