System glitches that left many workers in desperate need of cash and stranded have returned to haunt the Unemployment Insurance Fund (UIF) and foreign nationals are the worst affected.
Employees have accused the fund of withholding Covid-19 funding, mostly to foreign nationals working in the country, under the pretext that it was verifying their details with the relevant government agencies.
The Covid-19 Temporary Employee/Employer Relief Scheme (Ters), which the UIF administers, was established by employment & labour minister Thulas Nxesi in March 2020 to provide relief to those in formal employment expected to lose their income due to the lockdown. Foreign nationals who are employed legally and contribute to the UIF are entitled to receive the relief, too.
The fund, which started paying benefits in April last year, was one of the main pillars of the R500bn social and economic support package for SA announced by President Cyril Ramaphosa in March 2020.
Thembinkosi Mkalipi, chief director for labour relations at the department of employment & labour, said that in terms of the law, if an employee is registered and contributes to the UIF, regardless of their nationality, “there is no reason the employee should not be paid” their Ters benefits.
In a recent letter to Business Day, however, businessman Derek Pryce, who has an interest in a small printing business in Cape Town, wrote that a Zimbabwean employee had not been paid the Ters benefits, despite making monthly payments to the UIF and to the SA Revenue Service (Sars).
“We registered for the UIF Ters last year and the company was reimbursed for a portion of its salary payments in all cases except that of the Zimbabwean employee,” said Pryce.
“We have heard that the systems and processes at the UIF Ters programme were tightened in mid-2020 after wholesale looting by both employers and employees.”
A probe into Ters by the late auditor-general Kimi Makwetu late last year uncovered alleged fraud and irregularities in the system, including the overpayments of more than R84m to 1,183 applicants and underpayments of R251m to 1,700 applicants, along with the invalid rejection of beneficiaries, fraud and double-dipping.
“We have been told for months that Ters is verifying the details of foreigners with both home affairs and Sars,” said Pryce.
He said the outstanding claim is material to “our small business, especially in light of the difficult economic climate. It is extremely frustrating that we are unable to resolve the issue”.
Pryce’s employee is not the only one affected by the nonpayment.
Blessing Jaka, from Zimbabwe, who is an accountant at Accolades Boutique Venue, a Johannesburg-based wedding and conference venue with luxury accommodation, told Business Day that the last time he and other foreign national colleagues received a Ters payment was in September last year.
“We have not been paid since. All our filings with Sars and the UIF are up to date, but no-one is giving us the answers,” he said.
“This is very frustrating because we have proper work permits, and this lockdown has affected us badly. Our kids are not going to school because of outstanding school fees. We are stuck now; we don’t know what’s going to happen. And we don’t know who to contact to get answers.”
In a Facebook support group to assist those experiencing challenges with their Ters applications, of which Jaka is a member, Clair Danielsen wrote: “Our July to July [application] is still saying application not processed yet. We had to update with employees banking details, which we did last week Monday already. How long does it take to update on the system? So, it says application in progress and error says application not processed yet.”
Kenny Patane wrote “unending errors, I sure will remember this when I vote”, while another user, Isaac Nicholas, stated: “We are broke, can labour pay us, why are they taking time because they said it will be sent to our accounts but still, they are delaying.”
Rosemary Anderson, national chair of the Federated Hospitality Association of SA (Fedhasa), a trade association for hotels, restaurants, guest houses, self-catering accommodation, conference centres, clubs and taverns, said in a statement this week that the UIF needed to work with the private sector to eliminate bottlenecks.
Anderson said hospitality businesses were “running out of oxygen as they wait for UIF Ters system errors and bottlenecks to be resolved”.
“We simply ask the UIF to work with us so that we can help to convey better processes to our industry and find solutions to those bottlenecks if we are contributing to them.”
“It is very wrong for our tourism and hospitality industry not to be able to access their contributions, purely because the call centre number does not work, there are administrative inadequacies and system verification errors between Sars and uFiling,” said Anderson.
UIF spokesperson Makhosonke Buthelezi told Business Day the fund had to “tighten its systems” after the findings of the auditor-general. The fund would not pay out until it had verified the employee with relevant government agencies including home affairs and Sars, among others.
“Everybody, including foreign nationals, is subjected to that. Now the problem with most foreign nationals is that we can’t find them at the Sars or home affairs database. If we can’t find you at these institutions, we don’t have any basis to pay you. Otherwise we will be found wanting by the auditor-general,” said Buthelezi.
“We have been asking employers to encourage their employees to go fix their documents. There is no discrimination against foreign nationals working in SA, whatsoever.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.