Sars to jump in should UIF systems crash – minister Thulas Nxesi on Covid-19 claims

Labour minister Thulas Nxesi says Sars is waiting on the sidelines to help if the system for UIF claims crashes.
Labour minister Thulas Nxesi says Sars is waiting on the sidelines to help if the system for UIF claims crashes.

The SA Revenue Service (Sars) will help with the payments of Unemployment Insurance Fund (UIF) claims should the labour department’s systems crash because of the high volumes of claims received, labour and employment minister Thulas Nxesi said on Monday.

“We realised from the beginning when we started with the Covid-19 benefits that the systems we had were not designed for these high volumes. Sars is waiting on the sidelines in case our systems crashes,” Nxesi said during an interview on the breakfast show on 702 radio with host Bongani Bingwa.

Despite this, Nxesi said, the department had processed almost R1bn in the UIF's Temporary Employee/Employer Relief Scheme (Ters).

The scheme was set up after the labour department said it would fund financially distressed businesses during the Covid-19 pandemic. The department set aside R40bn in reserve for South African employers and employers who find themselves in difficulty caused by the global health crisis.

The minister told eNCA the UIF was working under extreme pressure.

"The system was never meant to face such a huge demand. The system is very small, helping with 10,000 to 20,000 claims. Now millions of workers are claiming. In terms of the system, we are not going to be able to deliver as we are supposed to deliver."

He said different institutions had been approached to help. "We have gone to Sars, to some companies."

Nxesi told Bingwa that Sars would likely come on board later this week.

Before the pandemic there were around 25 agents processing UIF claims. Nxesi said they had to increase the number of agents to more than 200 after the coronavirus outbreak.

He told 702 they were thinking of introducing 24-hour shifts to allow agents to work around the clock to process claims.

MoneyWeb reported on April 16 that the UIF had received 39,000 applications but had processed only 136.

Individual employers have taken to social media to express their frustration with the UIF scheme, citing difficulty in filling in the form and questioning the criteria.

One, in a letter to Business Day, wrote: "I have never been so frustrated and infuriated. I put in hours filling numerous forms covering 41 staff, only to be told the UIF and Ters have changed their application criteria. It is a disgrace that we are three weeks into lockdown and my staff are suffering."

The government last week announced amendments to the directive governing the Ters scheme, Business Day reported.

Welcoming the changes, Business for SA said: “The revised directive clarifies that an employer may claim benefits in respect of employees who have taken annual leave during this period; and that the employer may retain these amounts, provided it credits the employee with leave days proportionate to the value of the benefit in the future.”

“This means that it is not the case, as some legal opinions held, that there is a need to reinstate leave and put employees on unpaid leave in order to claim.”

The directive also urged employers to pay employees the equivalent of their Ters benefits in advance should these not have been received by the employer on their payment date, and to retain those amounts when the payment is received, according to Business for SA.

“One additional matter is that we understand that at some point the UIF was saying a separate bank account would be needed to receive the Ters monies. This is no longer going to be required. Businesses will be able to use their existing bank accounts for this purpose.”

Nxesi said on Monday that some employers had not submitted claims on behalf of workers, despite an earlier agreement reached with unions and employers to do so.

The decision to ask employers to submit bulk claims was taken to avoid congestion at the UIF.

“We have said if we allow individual workers [to submit their own claims], we might sit with millions for the system to deal with,” said Nxesi.

He said a report was expected to be released later on Monday.


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