By Diane Silcock
IN our January issue, we provided insights into the Skills Development Levy (SDL), giving employers valuable information on mandatory grants and how to claim back funds for training. In this issue, we focus on discretionary grant skills development funding for businesses that can be applied for at the discretion of the relevant Sector Education and Training Authority (SETA), no matter the size of an employer’s payroll.
Discretionary grant skills development funding for businesses
Schalk Kotzé, skills development facilitator for the National Employers’ Association of South Africa (NEASA), explains: “A company does not have to be paying skills development levies to be eligible to gain access to discretionary grant funding for their business. Even a small company, for instance, with a payroll below R500 000 that is exempt from paying skills development levies to SARS, can apply for funding in the specific sector in which they operate, as long as it’s relevant to what they are doing.”
The difference between mandatory and discretionary grant funding
Kotzé explains that with mandatory grants, a company needs to have implemented its training before applying for a grant, whereas with discretionary grants, it’s about the training that the company is planning to undertake, going forward, and within a specific timeframe that the relevant SETA will stipulate.
The type of training that falls within the scope of discretionary grant funding is Professional, Vocational, Technical and Academic Learning (PIVOTAL). It’s training that leads to a qualification or part-qualification, such as bursaries, learnerships, apprenticeships, scarce and critical skills and short skills programmes.
First steps to applying to SETAs and window periods
Any company applying to a SETA for discretionary grant funding needs to be a registered company that is operating within a particular sector.
The first step is for employers to register with the SETA under which their business falls. This will ensure that the company is kept informed of all communications and advertisements issued by the SETA, particularly in regard to the window periods in which a company can apply. No exceptions are made for applications received after a submission deadline.
These window periods vary from SETA to SETA. Some have multiple window periods throughout the year and others may have only one. The window periods could apply to PIVOTAL training or special projects that offer funding for a specific number of learners within a particular category or qualification, targeting companies with the capacity to accommodate these learners.
Project Implementation Plan (PIP), Memorandum of Agreement (MOA) and timeframes
“Although requirements and documentation in applying for a discretionary grant vary from SETA to SETA,” says Kotzé, “a company would need to devise a PIP that includes information such as the training they are planning to undertake, how many learners, the project start date and end date. Employers also need to confirm if they have capacity to train the learners and that they have mentors in place.”
An MOA, a contract between the employer and relevant SETA, stipulates the approved funding and training interventions, the terms and conditions for the specific funding and qualifications that the SETA has agreed to, and the timeframes. Kotzé stresses the importance of the company waiting for approval before commencing with their training.
“It has to be done in the implementation period stipulated by the SETA and therefore cannot commence prior to the given start date,” he says.
Financing of the training following approval
Training is arranged by the employer with a training academy that is accredited for the relevant qualification. The SETA pays the employer who in turn pays the training academy. Tranche payments for the discretionary grants differ from intervention to intervention and from SETA to SETA.
Kotzé emphasises that employers need to be mindful that funding is completely at the discretion of the SETA, and that the training applied for must be for skills relevant to the sector’s skills plan, and that are in demand in the industry in which the company operates.
