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South Africa pays $3 bln in pandemic-related jobless claims since March

Credit: REUTERS/Siphiwe Sibeko

South Africa's Unemployment Insurance Fund (UIF) paid out 49.5 billion rand ($3 billion) of special COVID-19 jobless claims between March and October, the labour minister said on Tuesday.

CAPE TOWN, Oct 20 (Reuters) - South Africa's Unemployment Insurance Fund (UIF) paid out 49.5 billion rand ($3 billion) of special COVID-19 jobless claims between March and October, the labour minister said on Tuesday.

The so-called TERS payments were introduced by the government to provide between 38% and 60% of the salary of employees laid off directly as a result of the pandemic.

Thousands of workers in South Africa have lost their jobs as one of the world's toughest lockdowns saw many businesses permanently close their doors.

"Since the beginning of the lockdown, 49.5 billion rand had been disbursed in benefits in the form of over 11 million payments, reaching some 5 million laid-off workers," labour minister Thulas Nxesi told lawmakers.

Another 7.8 billion rand was spent in normal unemployment benefits during that period, he said.

The TERS payments system, however, has been hit by an investigation into possible fraud.

TERS payments were halted for two weeks from Sept. 4 after an investigation by the auditor general and Special Investigating Unit (SIU) identified serious irregularities, including invalid rejections and payments to ghost beneficiaries.

That led to the labour minister suspending the head of UIF and a four other executives pending further investigations.

"I must also state for the record that I directed the UIF that they must not make any payment on TERS benefit until there were clear systems and verification tools in place," Nxesi said.

Earlier on Tuesday, South African investigators told parliament they are probing 10.5 billion rand of the government's coronavirus spending for corruption, more than double the amount they were investigating two months ago.

Since the lockdown began in March, the government has been buffeted by reports of graft, putting President Cyril Ramaphosa under pressure as he has pledged to clean up his African National Congress party’s reputation after a decade of scandals under the previous administration. Ramaphosa has promised that any corruption during the COVID-19 pandemic will be dealt with harshly.

(Reporting by Wendell Roelf Editing by Mfuneko Toyana and Susan Fenton)

((mfuneko.toyana@thomsonreuters.com; +27117753153; Reuters Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net))

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