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Managing your Skills development claims

What is Skills Development?

Skills development is all the relevant training that an employer provides to their employees within the working environment. This includes on the job training as well as any outside training facilitation.

National Qualifications Framework

Outcome based training was introduced where individuals who had practical experience but no formal qualification could request a training institution to perform an exam to assess their capability and thereafter to awarded a qualification that was based on their actual experience. This method is known as the NQF (National Qualifications Framework) system which allows a single system of measurement in terms of educational levels.

The different levels are as follows:

  • NQF level 1 - General Education and Training (GET) levels - primary training and development up to grade 8 and 9 and ABET 4.
  • NQF 2 to 4 - Further Education and Training (FET) level -  secondary education including certificates and qualifications up to grade 12 or N5
  • NQF 5 to 8 - Higher Education and Training (HET) levels - higher education such as university degrees, doctorates and further research.

The SETA was established to ensure that training within various industries were within the parameters set out by leaders in the various sectors. Training institutions had to register and accredit their training courses and qualifications with the SETA and the South African Qualification Authority (SAQA)

Later the learnership system was introduced, one part theoretical and the other on the job training. The theoretical component is delivered by a learnership accredited training institution whilst the practical was provided within a working environment.   Organizations who were prepared to invest in the mentors and various necessary equipment were offered tax rebates of up to R50 000 and cash discretionary grants of up to R20 000, even grants to supply tools and equipment. Training costs can only be recovered once the training has in fact taken place. Learnerships are not for the timid organizations as it is an expensive intervention that requires a solid infrastructure and substantial financial investment.

In order to get these systems and plans off the ground it needed funding. So the Government introduced the Skills Development Act. The basis of this Act is that any payroll exceeding R500 000 per annum is required to pay 1% of their payroll amount to the Skills Development Tax. The employer is responsible for this expense as a component of its general statutory taxes (EMP 201 SARS form). The Act also stipulates that organizations may claim back up to 50% of what they have paid in terms of Skills Development Tax.    There is a catch. Organization may only claim if they pay SDL tax and they provide approved training to employees in the organization, internally or externally.

In order to claim, the organization has to submit an annual training report and workplace skills plan. The annual training report describes what training has taken place in the organization in the past 12 months and which employees received that training.    More detail around the training such as cost of training; method etc. is also required to ensure that the training received by the employees is in line with the training that is required by that specific industry as identified by the SETA.

The Workplace Skills plan describes (for the SETA) what training the organization will provide to its employees over the following 12 months. This should be based on the requirements of the organization and be in line with the critical skills for that specific industry (identified by the SETA).

Falsifying this information has serious implications and organization should be warned that this is not taken lightly. 

So how do you go about claiming?

  • Register with your particular Sector Education and Training Authority (SETA)
  • Determine the training would benefit your organisation and your employees and verify that this is in line with what the SETA prescribes for your industry / sector
  • Develop a training plan for the year.
  • Develop submit a Workplace Skills Plan to your SETA
  • Thereafter your organisation must submit a Workplace Skills Plan detailing the planned training for the forthcoming year and an Annual Training Report detailing the training actually done in the past year.
  • Be truthful and accurate