By Joon Chong, Partner, and Shane Johnson, Professional Support Lawyer at Webber Wentzel.
The Minister of Employment & Labour has announced the extension of the Covid-19 Temporary Employer-Employee Relief Scheme (TERS) benefits until the end of the national state of disaster. This announcement was confirmed in a notice published in the government gazette. This is an encouraging announcement, however, the Department of Employment & Labour (DEL) must still confirm whether it will be able to fund such an extension.
The Unemployment Insurance Fund (UIF) will continue to receive new TERS applications for the March – July 2020 periods until 15 September 2020. The UIF will not accept applications for these periods after this date.
New TERS applications for the August – 15 September 2020 periods (the current end date of the national state of disaster) will close on 30 October 2020. The UIF will not accept applications for these periods after this date.
The extension of Covid-19 TERS benefits follows the release of a report on TERS by the Auditor-General of South Africa (AGSA). The report deals with the findings of the AGSA on the audited TERS claims for April and May amounting to ZAR 28 billion. The findings in the report point to a lack of verification and controls in the processing of TERS claims.
The findings in the AGSA report, as reported by the media, reveal that –
- Over ZAR 140 million paid to applicants who had already received benefits from other state institutions (e.g. students who received stipends from the National Student Financial Aid Scheme)
- Over ZAR 10 million in overpayments based on incorrect calculations used in the early versions of the TERS system
- About ZAR 685 million paid to foreigners whose employers had not paid UIF contributions in the last 12 months
- Almost ZAR 170 000 paid to individuals indicated as being in prison
- Over ZAR 400 000 paid to deceased individuals
- Over ZAR 30 million paid to employees with invalid identity numbers
- About ZAR 200 000 paid to employees below the legal working age of 15 years old
Following the report, TERS payments for new and outstanding applications are temporarily suspended. Senior officials (including Commissioner Teboho Maruping) at the UIF have also been suspended. The DEL has seconded its Chief Operating Officer, Marsha Bronkhorst, to the UIF as Acting Commissioner.
The temporary suspension is underway to assist the DEL and the UIF to address the relevant concerns and to ensure that proper controls are in place before any further TERS payments are made.