Skills development has been identified as a key requirement for economic growth in South Africa, and for the economic empowerment of the previously disadvantaged majority.
As a result, the Skills Development Act (1998) provides a framework for the development of skills in the workplace. Amongst other things, the Act makes provision for skills development by means of a levy-grant scheme, and the establishment of sector-specific Sector Education and Training Authorities – or SETA’s – to administer the scheme’s funds and manage the skills development process.
In essence this Act provides that all organisations in South Africa with an annual wage bill of R500 000 or more must pay 1% of this bill as a levy (not to be deducted from the employees’ wages), to be collected by South African Revenue Services (SARS), on a monthly basis, together with PAYE and UIF.
Click here for a guide on the calculation of the SDL.
The monies allocated to the SETA are used as follows:
- 10% is retained by the SETA for the administration costs of the SETA;
- 20% is designated as Mandatory grants to fund education and training programmes contained in the WSP and ATR.
- 5% is designated as Discretionary grants, to be spent at the discretion of the SETA in support of the implementation of its Sector Skills Plan. Furthermore, it is critical to note that 80% of the discretionary grant fund (i.e. 40% of SDL) is allocated to PIVOTAL programmes. PIVOTAL is an acronym which means professional, vocational, technical and academic learning programmes that result in qualifications or part qualifications on the NQF.
PIVOTAL programmes are aimed at addressing scares and critical skills as identified in the SETA Sector Skills Plan.
It is critical to note that applications for both Discretionary and PIVOTAL Grant funding are not limited to the value of Skills Development Levies paid by the company. As not all levy-payers make the effort to access their SDL grants, a SETA may use the unclaimed money to increase the availability of Discretionary and PIVOTAL Grant funding available for projects that focus on achievement of the objectives of the National Skills Development Strategy.
The type of programmes which may qualify as PIVOTAL (accredited) type programmes include:
- Professional qualifications
- Vocational qualifications
- Technical qualifications
- Academic programmes (bursaries)
- Internships (leading towards a qualification)
- Workplace experience (with a qualification)
- Credit-bearing short course which forms part of a registered qualification (Skills Programmes)
- ABET level 4
- Artisan Programmes
How and when to apply for Discretionary Grants
Submission of a PIVOTAL Plan and Pivotal Report forms part of the mandatory grant submission requirements, due by the 30th of April each year, but does not constitute automatic approval of the discretionary grants under PIVOTAL programmes.
The PIVOTAL Plan, i.e. the submission of a company’s WSP-ATR will, however, be considered in the awarding of discretionary grants.
Employer Requirements when applying for Discretionary Grant funding:
- The employer must be registered with the relevant SETA.
- The employer must be up to date with levy contributions unless exempted from paying levies (proof of exemption must be submitted).
- The employer must have qualified for mandatory grants (Workplace Skills Plan).
- Applications for grants in support of scarce skills identified in the sector will be given preference.
- Employers hosting learners on learning programmes must comply with the following equity targets: 85% black, 54% women, 4% disabled.
- The application for grants must be submitted on the prescribed application form of the relevant SETA (usually submitted online).
- The employer must have demonstrated a successful track record in training delivery or other SETA funded projects or be willing to undergo an evaluation of company “readiness” for the implementation of learning programmes where applicable.
- The provider contracted to deliver the training must be accredited by the relevant SETA, Umalusi or CHE to deliver the applicable qualification.
- Proof of provider accreditation must be submitted with the application for grant funding.
- All applications must include a detailed implementation plan specifying the following: Learning programme description, date for training scheduled, each unit standard, and dates for assessments.
When to Apply for Discretionary Grants
The time of applying for discretionary grants differ from one SETA to the next. It is important that levy-paying companies keep an eye out for when SETA’s open their funding windows and allow applications from companies to access grants.
Below is a list of funding windows currently open:
- AgriSETA – AgriSETA invites all AgriSETA levy paying employers, Commodity Organizations, NGO’s, CBO’s, Community Based Cooperatives and small BEE firms to forward applications for Skills Programmes 18.1 & 18.2, AET, Graduate Placement, Commodity Organizations and Support to Rural Structures – Closing date: 31 January 2018 – agriseta.co.za
- CETA – The Thapelo Madibeng Bursary Scheme – Closing date: 31 January 2019 – ceta.org.za
- FoodBev SETA – FoodBev SETA invites Food and Beverage manufacturing companies to apply for the following learning programmes: Candidacy Programme, Employed and Unemployed and Learnership for Recognition of Prior learning (RPL),Employed – Closing Date: 30th of November 2018 – foodbev.co.za
- INSETA – 2018/2019 WSP/ATR Workshops for 2019 – Closing of registration: 30th of November 2018 – WSP-ATR2019@inseta.org.za
- MerSETA – Invites merSETA levy-paying companies, merSETA non-levy paying enterprises, non-profit organisations, public universities, public TVET colleges and BRICs-related organisations interested in co-funding international partnerships to apply for discretionary -funded projects. The applications are to be submitted during the merSETA’s second funding window for the 2018/19 financial year. Funding window opens 12 November 2018 – Closing date: 12 December 2018 – notice of intent to be submitted by email to firstname.lastname@example.org
- W&R SETA – 2018/19 INTERNATIONAL LEADERSHIP DEVELOPMENT PROGRAMME (ILDP) AND RETAIL MANAGEMENT DEVELOPMENT PROGRAMME (RMDP) Stakeholders informed that nominations for the W&RSETA’s flagship management development programmes, the ILDP and RMDP, are now open. Nominations are online and must be submitted with required documentation by 14 December 2018. – Closing date: 14 December 2018 – wrseta.org.za (Adverts attached).
If you register with Global Business Solutions we will be sure to notify you via email as and when discretionary grants are made available to employers across all the 21 SETA’s.
If you have any questions related to this article or Skills Development in general, please contact me on 021 418 1617 or via email.