Technical glitches and backlogs have hobbled the government’s flagship programme to cushion the Covid-19 economic shock, resulting in R4.2bn in unpaid claims and denying cash to nearly a million potentially deserving workers who haven’t had an income in three months.
President Cyril Ramaphosa’s team came up with a form of salary protection under which the Unemployment Insurance Fund (UIF) would pay out between R3,500 and R6,700 for three months until the end of June to workers forfeiting their salaries during the lockdown.
But the Covid-19 Temporary Employer/Employee Relief Scheme (Ters), which has paid out R26bn to 5.8-million employees to date, has been hit by technical malfunction, including problems with its registration system. Most recently, the site had to be temporarily shut down as it showed applicants’ confidential details.
According to labour minister Thulas Nxesi’s report on the UIF relief plan as of June 25, and seen by Business Day, 965,751 employees covered by 176,102 employers have not been paid because they were not found on the system.
Just over R770m was paid out to employees and was paid directly by the UIF. More than R135m was paid to domestic workers, while some R639.8m was paid to foreign nationals.
With some employees who applied in April not yet paid, problems with the programme can be seen as a blow to the government’s broader plan under the R500bn relief package of ensuring that businesses retain workers even when they’re reeling from lockdown restrictions.
Huge blockage
The UIF on Friday said it was committed to ensuring that applications received in April and May that had been registered in the system would still be processed and paid once all relevant documents and information had been received.
Rob Legh of Business for SA (B4SA) said there was a huge blockage in the UIF’s uFiling system, where employers register, declare and pay UIF contributions. He said there were a large number of employees who the system says are not registered, despite employers saying they are.
The minister’s report shows that of the April applications, of which some were still being processed in June, just over R19.3bn had been paid out, while about R8.5bn of the May applications were paid as of June 25.
Legh said the April applications started quite early and had been running ever since, with quite a bit paid out. But it took time to open applications in May, forcing employers to dig into their pockets to pay workers. The applications were only opened on May 28.
This month, the applications were opened on June 24.
But there was another issue: the system showed confidential information of employers, company names, bank account details and payroll information, which was accessible by applicants. B4SA said it had asked the UIF commissioner to take down the site while the error was being repaired and advised employers not to make further applications at this stage.
UIF commissioner Teboho Maruping on Sunday said the glitch was found when the system opened up for the June applications. He said the UIF was not yet sure whether there was an attack from outside or whether it was an internal issue.
Maruping said the system was still on and only the June application was not available.
The UIF was in parliament on Friday, where it made a presentation to the standing committee on public accounts (Scopa) on the disbursement of funds.
It provided details on payments and on 16 fraud matters related to the Ters payment.
Scopa told the UIF to fix the shortcomings in its IT system. "The shortcomings of the system have made the UIF vulnerable to fraud and corruption from employees and employers who have made false claims amounting to millions of rand," Scopa chair Mkhuleko Hlengwa said.
The committee has asked the UIF to submit a detailed plan on its migration to a better system that will avoid such loopholes that open it up to fraud.
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