Government

R27 million paid to people who don’t exist

Staff Writer

 ·18 May 2026

South Africa’s specialised crime unit, the Hawks, has arrested three suspects in Mpumalanga in connection with an alleged R27 million fraud in which funds were paid to 700 ghost workers.

The Department of Employment and Labour welcomed the arrests, noting that the alleged fraud was linked to the COVID-19 Temporary Employer-Employee Relief Scheme (TERS).

The TERS was set up during the COVID-19 pandemic to provide relief to workers affected by the lockdowns that took place between 2020 and 2022.

However, the funds became a honeypot for many fraudsters and criminal elements who exploit the scheme and administrative gaps to extract state money.

According to the department, the suspects, including a construction company director, his spouse, and a relative, allegedly misused the TERS system by claiming benefits for fictitious employees.

This resulted in an estimated loss of over R26.9 million to the Unemployment Insurance Fund, which administers TERS on behalf of the department.

The arrests followed a joint investigation conducted by the Hawks’ Serious Corruption Investigation unit, the Unemployment Insurance Fund (UIF), the Special Investigating Unit (SIU), and the National Prosecuting Authority’s Asset Forfeiture Unit.

The department said the operation sends a clear and firm message that abuse of public resources will not go unpunished.

“The Temporary Employer-Employee Relief Scheme was established to support workers and employers during one of the most difficult periods in our country’s history,” it said.

“Any attempt to exploit this intervention undermines its purpose and deprives deserving beneficiaries of critical support.”

The latest case is just the tip of the iceberg when it comes to TERS fraud, with the Special Investigating Unit having already recovered over R100 million from those who unduly benefited from the scheme.

The SIU was authorised by President Cyril Ramaphosa to investigate the fraud back in 2021.

In April 2026, the SIU obtained preservation orders for assets of other implicated individuals totalling over R19 million for their alleged looting of the TERS fund.

Aside from schemes involving ghost workers, there are also cases of employers misrepresenting their employment relationships and claiming from the fund.

At the time, the SIU said it was seeking to recover losses suffered by the UIF, amounting to more than R148.4 million across multiple companies implicated in fraudulent claims.