SA recovers R3.4bn of fraudulent jobless claims

According to Auditor-General Tsakani Maluleke.
The AG said incorrect calculation of benefit amounts, fraud and double-dipping are being addressed. Image: UIF website

South Africa has clawed back almost R3.4 billion of irregularly paid Covid-19 jobless claims in an ongoing investigation into corruption linked to relief funds, the Auditor-General said on Wednesday.

The Temporary Employer-Employee Relief Scheme (Ters), a special jobless grant administered by the government’s Unemployment Insurance Fund (UIF), was introduced to provide between 38% and 60% of the salary of employees laid off directly as a result of the pandemic.

But the national audit office found that parts of the R500 billion pandemic relief package had been exposed to varying scales of fraud, angering the public at a time of record unemployment and an economic recession pre-dating the pandemic.

In September the regulator said its tiered investigation had identified around R145 billion of expenditure, meant for relief programmes like unemployment and poverty grants, showing “indicators of a higher risk of fraud”.

In response to the audit and its own investigations, Labour Minister Thulas Nxesi suspended the head of the unemployment fund and four other executives.

Releasing the second phase of the audit report in a televised briefing, Auditor-General (AG) Tsakani Maluleke said weaknesses in the system, such as incorrect calculation of benefit amounts, fraud and double-dipping, were being addressed.

“It is encouraging to note that, as at October 2020, the fund [UIF] has recovered about R3.4 billion of funds that may have been disbursed incorrectly,” Maluleke said.

“Progress has been made in addressing the previously identified system weaknesses. However, since most of these enhancements were made during September, we still identified payments that will need to be investigated, although there are far fewer.”

The UIF paid out R49.5 billion of jobless claims between March and October, Nxesi said in October.

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