SARS should pay out Covid-19 Ters benefit if UIF is not up to the task

14 April 2020

If the Unemployment Insurance Fund (UIF) is unable to cope with processing and paying out a high volume of Covid-19 Ters benefit applications, then this function should be handed over to the South African Revenue Service (SARS).

In the ordinary course of events, SARS collects UIF money paid over by employers and transfers it to the UIF. SARS has the expertise and sytems to pay over the Covid-19 Ters benefit to employers swiftly.

In any event, the UIF needs to communicate clearly about how many Covid-19 Ters benefit applications it has received, processed and approved. This will hopefully help to ease the anxiety and desperation of many South African workers, who do not know whether they will be able to put food on the table at the end of the month.

Some media reports today suggest that so far the UIF has received 27 000 applications for the Covid-19 Ters benefit. This seems like a very small number, given that over 1.5 million companies pay contributions to the UIF, that the overwhelming majority of those companies are currently shut down and many are in financial distress, and that thousands of employees are either on unpaid leave or temporarily laid off.

Moreover, it is not yet readily apparent when the UIF will start paying over the Covid-19 Ters benefit to employers, and when this money will begin finding its way into the pockets of despairing workers.

The Democratic Alliance (DA) reiterates its call upon the government to publish a daily dashboard of claims received, processed and paid in terms of the Covid-19 Ters benefit.

The UIF has a reputation for being inefficient, and it may face insurmountable human, infrastructural and IT-resource challenges in paying over the Covid-19 Ters benefit timeously.

In 2019, the UIF paid out 817,743 claims over 12 months. Of these claims, only 24,743 were made online by u-filing. During the lockdown, all UIF claims have to be processed electronically since Labour Centres are closed.

We need to know, very quickly, on the basis of hard facts and figures, whether the UIF is up to the task of processing and disbursing monies for a high volume of Covid-19 Ters applications.

If it is not, then this function should be transferred to SARS to administer with immediate effect.

Issued by Michael Cardo,DA Shadow Minister of Employment and Labour, 14 April 2020