Minister of Employment and Labour, Thulas Nxesi has warned that the UIF does not have unlimited funds, and it could soon run out of money to payout.
“We have about R50 billion available. The question we need to answer now is what is the way forward when we have to deal with mass unemployment? This is a serious matter that the UIF board is looking at.”
“It is difficult at this stage to determine all the retrenchments. But if the worst comes to the worst, we might see ourselves in the 2008 situation, where we would have to appeal to government.”
The UIF has managed to recover R3.4 billion from overpayments and employers that were incorrectly paid.
These overpayments and incorrect payments happened mostly because the fund has never dealt with making large payouts until Covid-19 hit.
“The UIF as a fund has never been geared towards making these massive number of payments that were expected to be made during the TERS period.”
The fund also experienced instances where people would claim funds, even though they did not have an employer/employee relationship.
“We paid people on identity numbers. If you put an identity number in and you declare that this person is working for me, in good faith the fund would’ve paid in terms of their TERS payments. That is why the AG (Auditor-General) made the findings that they made,”
In September, Auditor-General Kimi Makwetu, found that there were many irregularities with the UIF TERS.
The irregularities found by Makwetu include overpayments, underpayments, invalid rejection of beneficiaries, fraud and double-dipping. The auditor-general then called for changes to be made to the system and the overall payment of TERS.
The payments were halted for two weeks to fix deficiencies in the payment system which saw over R30 million paid to the wrong people.
The findings also led to the suspension of the UIF Commissioner, Teboho Maruping, and his management team.
Nxesi has said that the UIF will continue to make payments as long as applications were submitted before the closing date of 31 October 2020.
The more you understand yourself, the more silence there is, the healthier you are. —Maxime Lagacé