Where does the money go?
SARS collects all SDLs of which 20% goes to the National Skills Fund and 80% to the SETAs. SETAs retain 10.5% for their own administration, 0.5% the Quality Council for Trades and Occupation (QCTO) for quality assurance, 20% is dispersed back to compliant and participating employers (Mandatory Grant) and allocate 49% to their Pivotal pool of funds. 80% of this Pivotal pool of funds is available to employers in the form of a Pivotal Grant (subject to application and success submission of a Pivotal Grant Plan) and 20% is reserved for Discretional funding of compliant employers (subject to application/allocation). Non-compliant or non-participating employers’ Mandatory Grant is swept into the discretionary pool. SETAs may also apply for additional funding from the National Skills Fund for special projects. Should the SETA not use the funds at their disposal they are swept back to the National Skills Fund (NSF).
What is a Mandatory Grant and how do I access it?
The Mandatory Grant facilitates a reimbursement of training expenses incurred (both internal and external) by a compliant employer of up to 20% of their Skills Development Levy contribution, subject to:
- The employer being up to date with the payments of Skills Development Levies due
- The compliant compilation and submission by the 30th of April of a Workplace Skills Plan (a plan of the training to be carried out within the next reporting period April to March)
- An Annual Training Report (a report of the training undertaken in the previous reporting period explaining any variances)
- For employers:
- Of more than 50 people, they are in addition required to create a representative Skills Development Committee whose collaboration on identifying skills requirements are evidenced through the provision of minutes
- Of less than 50 people there is no requirement for a Committee and there is a simplified WSP & ATR submission required
- The historical achievement of the previous Workplace Skills Plan (as from the 1st of April 2013) to an extent that satisfies the criteria for implementation outlined by the SETA
- Unionized workplaces consulting and approving WSP & ATR submissions including its sign-off by an appropriately empowered employee representative
Companies who don’t participate forfeit their Mandatory Grant each year. Their unclaimed money, plus the SETA’s discretionary allocation and any special funding received by the SETA from the National Skills Fund (NSF), provides funding to participating employers in excess of what is available as their Mandatory Grant (20% of their 1% Skills Development Levy) and Pivotal Grant (up to 49% of their 1% Skill Development Levy). This funding is applied for, and allocated by the employers SETA, at their sole discretion.
What are the benefits of participating?
Employers can benefit from financial incentives (Section 12H(a) a SARS incentive) and participants may access funding from respective SETAs. Organizations will also optimize their B-BBEE compliance by aligning training objectives and will address skills shortages through participation.