UIF commissioner Teboho Maruping
The department of labour has so far recovered R2.5 billion from employers who fraudulently claimed Covid-19 Temporary Employer/Employee Relief Scheme (Ters) benefits and is still continuing with its audit of companies in this regard.
Smiso Nkosi, the deputy director in the office of Unemployment Insurance Fund (UIF) commissioner Teboho Maruping, on Tuesday highlighted the findings of the department’s Follow the Money project, which aims to verify the R62.3 billion of TERS payments distributed during 2020 and 2021.
Nkosi said the aim of the project was to ensure the funds did reach the intended beneficiaries at the right time and were not abused or misused by employers. The department had employed 27 firms to complete the verification process.
He said the department had so far verified R34.7 billion in payouts, of which R2.5 billion in fraudulent payments had been recovered so far. Most cases were uncovered in Gauteng, Limpopo, Mpumalanga and KwaZulu-Natal, followed by the Eastern Cape, the Free State and the Western Cape.
Among the invalid claims uncovered during the audit have been instances where employers deducted a UIF fee on Ters funds, employers told workers they were giving them the funds merely as loans and staff were paid less than was due to them.
In one case a company that was supposedly based in the Free State had defrauded the department of R 1 770 249 by filing claims using the identity numbers of people who were not employees, Nkosi said.
“The business had never traded before lockdown and was based in the Free State. The ‘employees’ they applied for are in KZN and when we spoke to them they said they had never been to the Free State,” he said during a seminar for employers in Umhlanga.
In other cases the directors of a company where employees had last worked in 1980 resigned immediately after receiving R 2 923 481.38 in Ters funds; a café with just three employees applied for 306 staff and got payouts totalling R 3 706 848.98; and in a third case a resident claimed R582 000.40 for a local business that did not exist and was never registered with the Companies Intellectual Property Commission.
Elsewhere, an employer collected identity numbers to claim R 1 933 690.25 and after the matter was investigated signed an admission of debt for the full amount received. Another employer who colluded with a labour broker and Zimbabweans to claim R 14 033 858.39 for fictitious employees has also signed an admission of debt.
Nkosi said 16 people have been convicted of committing Ters-related fraud, theft and money laundering crimes and face sentences ranging from suspended prison terms to 20 years direct imprisonment.
All companies to which benefits were directly into their bank accounts to disburse funds to their employees will be investigated for potential fraud, he added.
“We are a department that has zero tolerance for fraud. Our methods of recovery are different and once we follow the money to fraud it goes to the Fusion Centre,” Nkosi said.
The centre is a governmental anti-corruption task team that was founded in 2020, comprising the National Prosecuting Authority, the Directorate for Priority Crime Investigations (the Hawks), the South African Police Service and the Asset Forfeiture Unit.
Nkosi said businesses’ assets such as vehicles and cars that had been purchased with fraudulently obtained funds would be seized by the state and sold to recover the money, while perpetrators face criminal charges.
He advised employers who realise they have erred from following the law regarding Ters payments to admit this upfront to auditors and resolve the matter so their cases can be closed.