UIF Under Fire Amid Calls for Administration and Forensic Investigation
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Business Unity South Africa (BUSA) formally withdrew its representatives from the Unemployment Insurance Fund (UIF) board and all UIF-related structures at National Economic Development and Labour Council (NEDLAC) on 2 July 2026. The move follows six years of engagement that BUSA says produced no meaningful reform.
BUSA is the apex representative body for organised business in South Africa. It engages with government and labour through the NEDLAC, the statutory forum for economic and labour policy dialogue between government, business, labour, and community groups.
Key Issues Raised by BUSA
BUSA cited several specific failures at the fund. The UIF has repeatedly received qualified audit opinions from the Auditor-General due to weak internal controls, poor documentation, and ICT failures. Irregular, wasteful, and fruitless expenditure has occurred without meaningful consequence management.
Board meetings have frequently been scheduled or rescheduled at short notice, making it difficult for members to prepare adequately and repeatedly causing a failure to reach quorum.
The Special Investigating Unit (SIU) has identified irregularities in COVID-19 TERS payments, including fraudulent and improper claims processed during the pandemic. Some employer applications for distressed company relief remain unresolved after more than 12 months.
The uFiling system experienced ongoing failures, with thousands of workers submitting claims that were not being processed. The Department of Employment and Labour has since migrated benefit claims to a new UIF Online portal.
BUSA also raised concerns about the UIF's Labour Activation Programmes, arguing they overlap with the mandates of other departments and direct UIF funds toward non-contributors, while registered contributors face delays and exclusion.
The Compensation Fund
The Compensation Fund, which pays out claims under the Compensation for Occupational Injuries and Diseases Act (COIDA), faces similar problems. By 2025, it had received disclaimer audit opinions from the Auditor-General for twelve consecutive years. In April 2026, the Supreme Court of Appeal ruled in Van der Vyver Transport vs Minister of Labour that the fund was in a state of dysfunction and required an urgent, independent investigation. Injured workers and dependants of deceased employees continue to report significant delays in receiving payments.
Responses and Proposed Actions
BUSA CEO Khulekani Mathe called on Employment and Labour Minister Nomakhosazana Meth to place the UIF under administration, with an independent administrator appointed to stabilise operations, clear backlogs, and address governance failures. BUSA also called for a forensic investigation into all UIF expenditure.
Labour federations COSATU, SAFTU, FEDUSA, and NACTU separately called on President Ramaphosa to deploy the Hawks and SIU to investigate corruption at both the UIF and the Compensation Fund.
In May 2026, Parliament was informed that government plans to establish both funds as Schedule 3A public entities under the Public Finance Management Act, giving them greater operational autonomy while maintaining government accountability.
The UIF responded on 3 July 2026, stating that withdrawal from governance forums limits the ability to influence outcomes and is contrary to South Africa's social dialogue framework. It argued that benefit payment delays are partly caused by employers failing to submit accurate employee declarations, and said some of BUSA's proposed process changes were not consistent with existing UIF procedures.
BUSA remains a member of Nedlac but says it will pursue UIF reform through Parliament and other channels, and has not ruled out escalating the matter to presidential level.
What This Means for Employers and Accountants
Compliance obligations remain unchanged. Employers must continue to register, contribute, and submit monthly EMP201 declarations. Non-compliance remains an offence regardless of the fund's internal difficulties.
When advising clients on UIF or COIDA claims, accurate and complete documentation from the outset reduces the risk of delays. Claims may take longer than the standard 15 working days given current system pressures.
For a practical overview of UIF claims processes, see UIF Panic? Here's How to Be the Expert Clients Call First.
Article Source: Sowetan, BusinessDay