Auditors have been appointed by the UIF to look into companies being blamed using TERS payouts meant for their workers.
Some may have given loan to their employees using the UIF money , or used it for other purposes.
There are also about 725,000 applications that are yet to be paid out because companies need to provide more details about the workers, according to the government.
Due to many reports of companies misusing Covid-19 payouts meant for workers, the Unemployment Insurance Fund (UIF) has appointed auditors to “follow the money trail”.
“It is has been reported that some companies are yet to pay the workers what is due to them. We are aware of some companies allegedly giving loans to the employees using the payout money and that is against the law. We are also aware of other companies that are allegedly paying half the money and not the full amount, as well as companies using the money for something else other than the meant purpose,” said the Minister of Employment and Labour Thulas Nxesi in a statement.
Workers who are put on leave, have been laid off for a short period, or whose employers are no longer able to pay their full salaries due to the coronavirus crisis they qualify for a Covid-19 Temporary Employer/Employee Relief Scheme (TERS) payouts. The maximum a worker will get is R6,730 a month (if you earn more than R17,700) – while the minimum amount is R3,500.
Employees can also apply directly for the money from the UIF that is if their employer had not applied, typically the money is paid via the employer. Companies have to apply for the TERS payouts standing in for their workers, and then handout the payouts to them.
Nxesi also encouraged companies to make available more details for more than 725,000 workers who have not been paid out to till now. The UIF says the applications for these workers are have missing information. An amount of R3.2 billion is still due to these workers.
“It is tempting to regard this appeal as counter-intuitive in the sense that we would be wanting to save money because it is obvious that the demands on the UIF going forward are going to be huge. But we move from the point that it’s important that workers are not disadvantaged and as such, we ask for the details so that the Fund can assist those who need the money or for whom this may be the only source of funds,” Nxesi said.
Since April, the UIF has payed out more than R21 billion to 3.6 million workers.
Some companies, who have not been contributing to the UIF, have also been permitted to claim for TERS money. Nxesi cautioned that they will have to pay their UIF debts.
“There are many cases where companies have not declared workers or have not contributed for employees. We will be creating debt against those companies and they must know that they need to pay back with interest and other penalties owed to the UIF. It is in everyone’s interest to do the right thing. Even without being compliant, we have done the right thing and still paid them the Covid-19 relief and they also have to do the right thing,” said Nxesi.