TERS Fraud: R71 Million Recovered From Companies That Illegally Claimed Unemployment Insurance Fund Benefits

Several companies that falsely claimed finance from the Unemployment Insurance Fund's (UIF) Temporary Employer/Employee Relief Scheme (TERS) have been busted by a Special Investigating Unit (SIU), which also recovered at least R71 million from them.

The government agency, which was authorized by President Cyril Ramaphosa, had been investigating the matter since June 2021.

The unit investigated "allegations made in respect of the affairs of the UIF in terms of Proclamation R.8 of 2021," the agency said in a statement, Devdiscourse reported.

The statement further mentioned that the "SIU investigated TERS payments to persons who were not entitled to receive such payments; submitted false, irregular, invalid or defective applications to the UIF, including the causes of such maladministration."

TERS was originally introduced by the government for companies that were struggling because of the COVID-19 pandemic. The investigation began when the government realized some companies had unduly claimed funds.

To date, the unit has successfully "recovered cash to the value of approximately R 71.4 million since it commenced with investigations" and this amount also includes "R 9.9 million that was paid directly to the UIF by companies."

The unit also disclosed the names that were involved, including South African Airways Technical and RH Matjhabeng Hospital.

"Some of the companies that paid money directly to UIF include South African Airways Technical, which paid back R8.8 million and RH Matjhabeng Hospital, a private hospital in Free State province, among others," SIU revealed. "The hospital paid back R488 458.21."

The investigation disclosed that the hospital doesn't come under the TERS scheme and it was not supposed to receive the funds, noting that its operations were not affected by COVID-19.

"The hospital management confirmed that it unduly received the funds and agreed to pay back the money to the SIU," the agency explained. "Immediately after an agreement was reached, the hospital deviated from the agreement held with the SIU and paid back the money directly into the UIF account instead of the SIU."

SIU also informed the companies about a Zimbabwean citizen, who got sentenced to one-year imprisonment for committing TERS fraud.

"On 27 February 2023, the East London Magistrate Court sentenced Zimbabwean citizen, Admirer Sibanda to one year imprisonment and ordered that after serving the prison sentence that he be deported by the Home Affairs department to his country of origin," the agency shared. "Sibanda pleaded guilty to the identity theft charge, which was used to commit TERS fraud."

Aside from TERS fraud, SIU is responsible for investigating corruption and maladministration in the affairs of the Department of Water and Sanitation, Saldanha Bay Local Municipality, and Eskom Holdings SOC Limited. The unit is also in charge of recovering the losses the government has suffered because of these corruptions.