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No UIF payments after June

UIF spokesperson Makhosonke Buthelezi outlines the challenges faced in handling the deluge of Temporary Employer-Employee Relief Scheme claims.

NOMPU SIZIBA: The UIF Temporary Employer-Employee Relief Scheme [Ters] officially comes to an end today, June 30, 2014. It’s been a mammoth undertaking that has paid out R26 billion-odd to close on six million workers whose incomes were adversely affected by the nationwide lockdown effected in late March. But the process has not been without its hiccups and dramas, and several thousand people are awaiting payouts, which translates into untold social suffering.

Well, to give us his reflections on the performance of the Ters scheme, I’m joined on the line by Makhosonke Buthelezi, the spokesperson at the UIF. Thanks very much for joining us, Makhosonke. We understand that over 5.8 million workers have been paid out over R26 billion, but there are close to about a million people who are still waiting to be paid out – and some applications were made as far back as April. Why are people still having to wait?

MAKHOSONKE BUTHELEZI: There are a variety of reasons, but the main one, broadly, I can put as a lack of compliance by the employers. The bulk of those workers who are still waiting for their money are those that have not been declared to the fund. What employers sometimes do, or most of them do, is they under-declare – I don’t know for whatever reason – and now with this Covid-19, they claim for everyone, even for those that they did not declare. These are people that we can’t find on our database. The declaration is one of our main controls to make sure that we don’t just pay for anyone who is not on our database. So you’ll find those claims now delayed. We say, “Tell us about these other workers that we don’t know, that we can’t find on our database”. Almost each and every employer has that same problem. All of them are trying to declare at the same time, and what happens is they clog the system, which cannot handle the volume, both the system in terms of human capacity as well as the ICT system. Now there is a long queue in terms of the declarations, and that is why some of them have not been paid.

The other category is when we have banking details that did not pass the validation stage; then we cannot transfer their money.

Another category is when the employers did not furnish the information in the required file format. Some have failed to provide the details where they are supposed to be provided, as wanted by the UIF. So there’s quite a lot of different reasons why that number that you mentioned is still outstanding.

NOMPU SIZIBA: So why has there seemingly been a delay in each claim month? For example, we understand that most April claimants got their money only in May. And in the meantime employers were advised to start claiming on behalf of their employees for June only in late June. Why has this been the case?

MAKHOSONKE BUTHELEZI: There are various reasons., I think it started when we started opening the system. As you would recall, when they started with their system, employers could shop near to their place via an email Covid-19 …… and we realised after a few days that this wasn’t working because you’d find one employer submitting about 45 files. Now, if we have 30 000 employers submitting that number of files, and you have only a few officials who are manually checking each and every file, that couldn’t work. The result was we resorted to go onto the online system. We launched the online system on, I think, April 10. And I remember that Monday we launched the system. We developed the system, and  on April 16 we started keying – and we were already on the last day of the first lockdown, as you remember. I think that is why we had this lag. We were able to push with the April submissions, because we were able to pay within 48 hours.

But then we learned some lessons when we went into May and when we reconfigured the system. Firstly, when we opened the system, I think on May 27, we had that cable, that some mysterious leak of damage that delayed us. Then then we processed the applications, and we picked up on the week of the 9th some fraudulent activities. That’s when we had to shut down the system to tighten the controls. We lost three days during that time; but we have since managed to catch up.

But the biggest thing is that with the fraudulent claims we then tightened up the system. Somebody had made some changes in the April applications, changes that looked very suspicious to us. We took this as an exception, so that we can investigate further.

NOMPU SIZIBA: So who has been doing the fraud? Is it people internally or employers?

MAKHOSONKE BUTHELEZI: I’ll give you an example of the one that is already out there. It is an individual who used to work for this company, who claimed on behalf of the company, who for some strange reason changed the banking details that were there of the company, and put their own banking details, and the money consequently landed into the account of that individual. But there are other cases, this one and other ones we are still investigating whether there was collusion internally or maybe some weakness in the system, and so forth. So that is why we also tightened up the issue of changing banking details, changing the profile, who can apply, and all that.

NOMPU SIZIBA: You guys are not dealing with chump change. So just give us an indication of the kind of leakage that you’ve seen in terms of the fraud.

MAKHOSONKE BUTHELEZI: Let me just explain, some of the employers have appointed  certain people in their companies to apply on their behalf, and load all the information of their employees and change the banking details and so forth. Now we’re touching up that. And there was also an issue where you could phone the call centre and change the user name or log-in name, log-in details, if you wanted to get into the system. We have since taken those rights away from the call centre. I think those were the two major things. But we are trying to also see where the transactions being made in terms of getting the IP addresses of where the applications are made, and where the changes are made. So those are some of the issues that we are trying to close so that we reduce two incidents of fraud.

NOMPU SIZIBA: Yeah. Makhosonke, the Ters scheme has obviously been a very big task, clearly, but we do understand that your usual claimants, like those who are claiming unemployment insurance for non-Covid-related reasons, and those claiming for things like maternity leave, some of these people have expressed grievances that their matTers haven’t been attended to timeously because of the focus on the Ters scheme. You did talk about human capacity earlier – has resource allocation been a challenge during these past few months?

MAKHOSONKE BUTHELEZI: Let me explain. When you apply for normal benefits, you don’t have to apply at head office, which has been the case with the corporate tax benefit. All the applications come to us. With the normal benefit they go to the labour centres – 126 or so labour centres throughout the country. I think the issue there has been that, one, for a number we had shut the door even though we were working behind the scenes. That has been the issue. Then, secondly, not everybody was working. But we had made the online system available for normal benefits. And I think the main issue has been with the people who were already [receiving] the benefit of the UIF who had to come and sign every month. Here a person would normally walk into a labour centre, sign, and get his or her money after two days.

This time around they were unable to do that, in spite of the fact that we had made some arrangements, we had waived some of the conditions, where a person has to walk in, and we said, “Okay, we know you, you are due for payment; we’ll automatically pay you”. That definitely must be in such a way that the next payment has to be triggered by a form that is submitted. So now we had to get somebody who will do that on behalf of the client, so that the system triggers payment. So that is why there are some of these frustrations. But we have been processing the claims, the normal claims. We did not ignore them as such. But those are some of the challenges.

NOMPU SIZIBA: Today is essentially the deadline for employees to apply for assistance, through their employers, of course, for the Ters scheme. Is this government’s final word? Has the scheme come to an end today? And what about those people who are still awaiting payment since April – what happens with them and their money?

MAKHOSONKE BUTHELEZI: For those who are still awaiting payments, we do have a liability. We are going to pay them – everybody who has applied. At the end of it all, we received the outstanding information. Their documentation and information is verified. Ultimately we are going to pay them. I’m talking about those who have been waiting from April, May and June when we opened the system. We’re going to honour our applications. We will definitely pay all of those outstanding issues. What we’re not going to do is take new applications beyond June because the directives were very specific that this assistance is only for three months.

NOMPU SIZIBA: So, not withstanding some of the challenges that we’ve discussed, the task of paying the kind of money that’s been paid out in a matter of months has been a mammoth one. Which role-players have been working behind the scenes to make this possible, including the UIF? Have you been working with the private sector?

MAKHOSONKE BUTHELEZI: We’ve worked with the private sector, but the main stakeholder here has been the Nedlac partners – all the social partners in Nedlac. They have been behind this. We’ve also worked with Sars in terms of certification. Some of the teams have even worked with Home Affairs in terms of assisting us with the validation of the information from the foreign national workers. And we’ve also been assisted in terms of the call centre; we’ve received support …… So yes, there are quite a number of companies that have really assisted us in terms of making these huge payments possible.

NOMPU SIZIBA: And then one last word. When you reflect on the past three months and this massive initiative, what would you give yourselves out of 10?

MAKHOSONKE BUTHELEZI: Considering that UIF is not a national disaster fund, UIF is designed for unemployment benefits, we’ve had to put the system [together] in a very short space of time. Normally per year we pay close to R15 billion. To date we’ve paid close to R30 billion and, once after June the operations, the system opens, obviously we are going to exceed the R40 billion that we have set aside. When we weigh that against obviously the efficiency of the payments, and the fact that we still have people who have not received their payments, I must commend us, because there is no insurance company out there that will pay anyone if they don’t pay any premiums. And for most people who are outstanding that we have not paid, there are companies who are not registered, there are companies who did not declare them and were not paying the premiums. But all the same we said, you know what, we understand the plight of the workers; you can submit their claims, you can submit their declarations; we will do them as the UIF. So I will give us more than seven. I’ve got a 10 in terms of the rating.

NOMPU SIZIBA: Fair enough. Thanks so much Makhosoke for your time.

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