Two-year anniversary of the UIF’s Covid-19 TERS
04 April 2022

The 26 of March 2022 marked the two-year anniversary since I publicly announced that the Unemployment Insurance Fund (UIF), an entity of the Department of Employment and Labour, established the Covid-19 Temporary Employer-Employee Relief Scheme (Covid-19 TERS). 

 The Scheme was primarily formed to save jobs and ease the financial burden on businesses but most importantly, their vulnerable workers after the country was placed on the first hard lockdown from 26 March 2020 to 16 April 2020 to contain the spread of the coronavirus (Covid-19) pandemic. 

 When the unseen enemy hit South Africa, we were already seized with slow economic growth and the lockdown further placed us in a dire situation, resulting in a devastating effect on businesses and workers. Therefore, it was important to introduce Covid-19 TERS to balance curbing the spread of the virus and keep South Africa's economic wheels going.

 Fortunately, the decision to set up Covid-19 TERS was made after extensive deliberations and concurrence with social partners at the National Economic Development and Labour Council (NEDLAC). Equally, the pronouncement was in line with the Department's mission which highlights amongst others, reducing unemployment and poverty through policies and programmes developed in consultation with social partners. 

 Covid-19 TERS was also legally valid because section 5 (b) of the Unemployment Insurance Amendment Act (Act 10 of 2016) allows the UIF to provide financial support to schemes that aim to retain employment for workers.

Covid-19 TERS was made possible by the accumulated contributions of workers and the Public Investment Corporation's (PIC) investment management, which had seen the UIF grow from R53 billion in 2011 to R151 billion before the introduction of Covid-19 TERS.

This healthy state of the UIF's financial position enabled us to set aside an initial budget of R40 billion for Covid-19 TERS for three months. However, the National State of Disaster was extended and subsequently, the Covid-19 TERS was also extended.

To date, the UIF has disbursed R64 billion to 5,7 million workers, surpassing our initial budget by a colossal R24 billion. 

Covid-19 TERS is by far one of the most effective monetary government interventions as it constituted 29% of the 41% stimulus package successfully disbursed by 31 March 2021. In fact, His Excellency, Presidency Cyril Ramaphosa, described Covid-19 TERS in one of his weekly newsletters as “a lifeline to struggling businesses and employees. It (Covid-19 TERS) made the difference between companies remaining open and being forced to close, between jobs saved and jobs lost".

While I agree with the President and celebrate this mammoth achievement, the administration of Covid-19 TERS was not without challenges, as it required an overhaul of the UIF to meet the new mandate while policies and directives also had to be developed to meet the expectation. Changes to processes, procedures and systems without any reference for this scale of operation were essential. To enhance capacity and service delivery, the Fund also added 290 call centre agents to help clients with UIF enquiries since our 125 labour centres were not open to the clients.

While plenty of companies and workers have testified of the positive financial impact of Covid-19 TERS, the Auditor-General of South Africa (AGSA) report exposed some irregular payments and we learned with dismay that some employers were not paying over the monies to their workers.

However, we implemented the recommendations of the AGSA, cooperated with banks and other government departments to validate accounts and at least 5 million ID numbers to avoid fraudulent payments. Stringent security controls were also put in place including verification of salaries, as well as blocking all underage and UIF employees' ID numbers from applying.

In July last year the country experienced a devastating civil unrest. Businesses and shops were looted in Gauteng and KwaZulu Natal with billions of Rands lost in damaged businesses and this resulted in approximately 32 934 workers facing retrenchments.

UIF was called again to intervene to save potential job losses and this resulted in the launching of the Workers Affected By Unrest (WABU) relief scheme. The purpose of WABU was primarily to protect those workers who suddenly found themselves with no place to work due to their workplaces being damaged.

The relief worked along the COVID-19 TERS where employers applied on behalf of employees, however this time around we ensured that the benefit is paid directly into the worker's bank account to avoid delays and prevent the funds from being used as a business rescue for employers.

Currently, beneficiaries have been paid an amount of R14 148 118,29 in both Gauteng and KwaZulu-Natal. UIF continues to pay this benefit as and when complete and competent claims are received, and the claim has passed all checks with various institutions.

The UIF also created a fraud hotline number which conveyed information to our forensic auditors that conducted the “follow the money project" to account for every cent and rand paid through Covid-19 TERS. To date, the project has resulted in close to R900 million being returned to the UIF's coffers while our partnerships with financial institutions and law enforcement agencies at the Fusion Centre have led to several arrests and convictions in courts. 

 The return of the UIF Commissioner, Mr Teboho Maruping, and other senior executives from suspension has also brought much-needed leadership stability to the UIF and inspired confidence amongst staff, clients and stakeholders.

 As some level of normality has resumed this year, including a lot of economic activity, we are winding down and preparing to close Covid-19 TERS by paying all valid and remaining claims. In this regard, we will continue urging employers to correct all errors on the Covid-19 TERS portal to enable us to disburse all outstanding monies and bring an end to the Scheme.

 During the 2022/2023 financial year, the Fund will focus mainly on improving service delivery and providing social security (paying normal UIF benefits) to contributors and their beneficiaries in line with section 27 (1) (c) of the constitution which states that “everyone has the right to social security". 

The UIF remains in a sound financial position, as the assets have increased from R115 billion to R124 billion by 31 December 2021, and this will ensure future payments of normal benefit claims and administrative costs.

The UIF will also be one of the key instruments in our pursuit of fully achieving the expanded mandate of the Department of not only focusing on labour market regulation through policies and legislation but also on creating and preserving jobs. 


Thulas Nxesi, MP.

Minister of Employment and Labour​