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UIF Covid-19 payout: Some employers have stolen cash meant for workers

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Amid reports of companies stealing Covid-19 payouts meant for workers, the Unemployment Insurance Fund (UIF) has appointed auditors to “follow the money trail”.

“It is alleged that there are companies that have not paid the workers what is due to them. We are aware of some companies allegedly loaning employees the money and that is not legal. We are also aware of other companies that are allegedly paying part of the money and not the full amount, as well as companies using the money for something else other than the intended purpose,” said the Minister of Employment and Labour Thulas Nxesi in a statement.

Workers who are put on leave, have been laid off temporarily, or whose employers can’t afford to pay their full salaries due to the coronavirus crisis are entitled to 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.

While employees can now also apply directly for the money from the UIF if their employer did not apply, typically the money is paid via the employer. Companies have to apply for the TERS payouts on behalf of their workers, and then distribute the payouts to them.

Nxesi also urged companies to provide more details for more than 725,000 workers who have not yet been paid out to date. The UIF says the applications for these workers are still missing information. An amount of R3.2 billion is still due to these workers.

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“It is tempting to think of this appeal as counter-intuitive in the sense that we would be wanting to save money because it is clear that the demands on the UIF going forward are going to be massive. But we move from the point that it’s important that workers are not disadvantaged and as such, we appeal for the details so that the Fund can help those who need the money or for whom this may be the only source of funds,” Nxesi said.

Since April, the UIF has disbursed more than R21 billion to 3.6 million workers.

Some companies, who have not been contributing to the UIF, have also been allowed to claim for TERS money. Nxesi warned 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 raising 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 all our 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.

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