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)
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.
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 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.
Mandatory Grants are paid by the Seta if the company fulfills the requirements to receive the grants.
In order to qualify to receive the mandatory grant, the levy-paying employer has to meet the following criteria:
•Be registered in terms of the Skills Development Levies Act.
•Be an up-to-day levy-payer that is registered in terms of the Skills Development Levies Act. The skills development levy is imposed to encourage learning and development in South Africa and is determined by the employers’ salary bill. The levy is 1% of the salary bill. Companies with a wage bill of less than R500 000 do not have to pay this levy.
•All levy payments need to be up to date at the time of the approval and for the reporting period.
•Employ a skills development facilitator.
•The WSP and ATR are submitted by the required deadline.
•The WSP for the previous reporting period has been submitted and implemented according to the prescriptions for implementation by the particular SETA.
•Any employer who has a recognition agreement with a trade union will have to provide proof that WSP and ATR have been subject to consultation with recognised trade unions and they have been signed off by the relevant union.
To claim back the 20% for mandatory grants employers have to submit a Workplace Skills Plan and an Annual Training Report on or before 30 April of each year.
For assistance with WSP/ATR submissions or Discretionary and Mandatory grant applications contact us on email@example.com or call 0100300080