The Skills Development Act, 1998 as well as the 2012 SETA Grant Regulations, distinguishes between two types of grants, namely Mandatory grants and Discretionary grants
To apply for any Mandatory grants a company has to be registered with SARS and possess an allocated Skills Development Levy number (LXX07XXXXX). This is the sole responsibility of any company who has a total employment payroll which calculates to MORE THAN R 500 000.00 per year; as per Skills Development Regulation No. 35940); If your annual Payroll is less than R 500 000 per year your company is exempt from paying Income Tax in terms of Section 10(1) of the Income Tax Act No.58 of 1962.
The company has to be registered at the relevant/correct SETA according to the main business activity of the company (this generally takes between 3 – 6 months after registering for Skills Development levies with SARS if the EMP 101 submitted was fully completed);
A SDF should be appointed by the company and should be approved by the SETA prior to submissions (SEESA SDF will provide you with the appointment letter to sign and return); Demographic details of the company workforce and relevant training records (Proof of training within the SETA reporting period) should be available (SEESA SDF will inform you of any additional or pending information which must reach the SDF well before the due date);
In order for Mandatory Grants to be paid, all Skills Development levies should be up to date with SARS (you cannot claim for something you have not paid); Mandatory Grants can only be applied for the relevant and current skills year.
If no Training was implemented and reported on in the previous year (actual training in ATR) & we only submit a WSP (planning)– No Mandatory Grants will be paid out, but will be advantageous for your next submission in 2021 when the planned training was implemented.
Depending on the SETA Requirements, the SETA might:
- Pay only the amount of the expenditure of relevant training up to 20% of the SDL [the company thus has to spend at least 20% of the SDL on relevant training in order to receive the total grant amount]
- Not pay MG on first time submission and/or if the WSP was not submitted the previous year.
- Require specific / accredited training.
- Requires original Documents (Bank details, training committee minutes, Authorization Signatures)
Non-participation in the Skills development process & Mandatory Grant applications:
- Will result in non-payment of any Mandatory Grants to your company;
- May result in rejection of Mandatory Grants in 2020/21 when your company will be seen as participating for the first time in the Skills Development Process;
- May result in rejection of any Discretionary Grant applications for your company;
- May impact negatively on Skills Development on your BBBEE scorecard