The Department of Labour has begun paying out claims to companies that are registered with the Unemployment Insurance Fund (UIF) and have applied for Temporary Employer/Employee Relief Scheme on behalf of their employees.
The TERS applies to South African employers who are facing distress, are on lockdown and are unable to pay salaries due to the lockdown.
To date, the UIF says it has received just over 55,268 applications from employers representing about 1,601,767 employees. In total, the UIF has over 1,800,000 employers registered on its database representing more than 8-million workers.
Of the received applications, the UIF has processed 37,673 employer applications – which means that 606,462 employees will receive their benefit.
About 9,938 applications couldn’t be processed due to errors and the affected companies have been notified to correct their applications and resubmit. Some of the errors identified relate to incorrect banking details, making it impossible for payments to be processed.
As of 16 April, the cumulative amount paid is R1.1 billion.
“The UIF is working round the clock to meet the extraordinary volumes of requests for assistance presented by the Covid-19 pandemic,” said Minister of Labour Thulas Nxesi.
“The Covid-19 benefit scheme will provide much-needed relief to employees who have been laid off work or unable to earn an income due to Covid-19.”
Nxesi noted that the UIF system is under pressure as the fund is currently experiencing high volumes of requests due to the Covid-19 pandemic.
The minister added that his department is now in discussions with other public entities and the private sector to build additional capacity to fast track the processing of applications and payments.
“We have acknowledged that our system was not designed to accommodate the increased volumes of requests that we are witnessing due to the Covid-19,” said Nxesi.
“We have already taken steps to mitigate this risk. We have asked the South African Revenue Service to work with us to resolve the backlog we are currently experiencing.
“SARS has responded positively and they are sending a team to work with the UIF to ensure that we distribute funds to deserving beneficiaries as swift and cost-efficient as possible.
“We have equally engaged other private sector companies to work with UIF to enhance the capacity of our IT system to respond to the growing number of requests.”