MANDATORY, PIVOTAL & DISCRETIONARY GRANTS 1 April March 2013

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1 MANDATORY, PIVOTAL & DISCRETIONARY GRANTS 1 April March 2013

2 BACKGROUND The Mandatory and Pivotal Grant criteria represents a response to NSDS 3 thus ensuring alignment of the merseta skills priorities as set out in the merseta Sector Skills plan (SSP) The regulation makes provision for: Mandatory grants which disburses up to a maximum of 40% of total levies paid as a way of incentivising the submission of workplace skills plans (WSP) and Annual Training Reports (ATR) towards part of the data required for research linked to the Sector Skills Plan. PIVOTAL grants which dedicates 10% of total levies paid towards job seekers/unemployed. 2

3 BACKGROUND Companies employing 50 or more employees must ensure that the Workplace Skills Plan, Annual Training Report and Pivotal Training Report is signed off by the respective Training forum Labour representative. Minutes of Training forum meetings should be submitted in support of applications for Mandatory Grants. In addition, subject to sub regulation (1), a SETA may allocate additional pivotal grant funds to an employer for pivotal programmes, should the employer have spent more than 3% of their payroll on training as reported in the pivotal training report and verified by the SETA. This allocation will be based on criteria set by the merseta Governing Board. 3

4 CRITERIA FOR EVALUATION Mandatory Grant applications must be aligned to the merseta Sector Skills Plan (SSP) the emphasis being on the priority skills identified within the merseta SSP - SSP available on Where available all learning interventions shall be aligned to SAQA registered qualifications and unit standards where such qualifications and unit standards are available. All learning interventions to be carried out by an accredited institution. Available on and/or Learning interventions funded by discretionary grants will not be eligible for mandatory grants and shall be reported on in the WSP / ATR. There should be a clear correlation between the value of the learning interventions planned and the value of the mandatory grant. 4

5 CRITERIA FOR EVALUATION Compulsory safety training and re-training required to be conducted in terms of applicable legalisation will not be considered for mandatory grant purposes. However, safety training required as part of a registered qualification may be included in the WSP and ATR for mandatory grant purposes. EXAMPLE 1 Companies who spent 100% or more of the value of the grant but completed less than the planned interventions within their respective WSP s will also qualify for the full value of the mandatory grant. EXAMPLE 2 5

6 CRITERIA FOR EVALUATION Consideration will be given for inclusion of training implemented into the ATR which was not specified in the WSP, subject to such training leading to a qualification and a motivation being submitted with the WSP/ATR submission. Provision is made on the Seta Management System (SMS). Disbursement of Mandatory Grants will be based on the current merseta funding model and the actual direct costs of training interventions not included in the merseta funding model. EXAMPLE 3 Pro-rata payments will be based on the percentage implementation of training interventions to the value not exceeding the expenditure on training to a maximum of the Mandatory grant. 6

7 PROPOSED LEGISLATIVE REQUIREMENTS With effect from 31 March 2013 all surplus funds in a SETA for each financial year must be transferred to the pivotal grant within 10 working days after 31 August annually. Companies must ensure that all required information is submitted by the due date. Failure to do so will result in the grant not being approved. A Seta must allocate a mandatory grant to an employer employing 50 or more employees that has submitted an application for a Workplace Skills Planning and Annual Training Report grant in accordance with sub regulation (2) and as a minimum in the format contained in Annexure 2 to these Regulations. Clarity will be sought during the public comment process. An application for a mandatory grant in terms of sub regulation (1) must be submitted by 30 June. There is no provision for extensions. 7

8 MANDATORY & PIVOTAL GRANT RECOVERY BY EMPLOYERS The mandatory grant to be paid by the SETA must be up to a maximum of 40% of the total levies paid by the employer in terms of section 3(1) read with section 6 of the skills Development Levies Act during each financial year. A SETA must not pay a mandatory grant and pivotal grant to an employer who is liable to pay the skills development levy in terms of section 3(1) of the Skills Development Levies Act, unless the employer Has registered with the Commissioner in terms of section 3 (1) of the Skills Development Levies Act; Has paid the levies directly to the Commissioner in the manner and within the period determined in Section 6 of the Skills Development Levies Act; 8

9 MANDATORY & PIVOTAL GRANT RECOVERY BY EMPLOYERS cont. Is up to date with the levy payments to the Commissioner at the time of approval and in respect of the period for which an application is made; Has submitted a workplace skills plan and pivotal training report that contributes to the relevant SETA sector skills plan as contemplated in section 10 (1) of the Act within the time frames prescribed in regulation 5 (2) of these Regulations; With effect from 1 st April 2012, has submitted and implemented its workplace skills plan for the previous financial year to the extent that it satisfied the criteria for implementation that must be established and approved by the SETA Accounting Authority based on guidelines provided by DHET; and 9

10 MANDATORY & PIVOTAL GRANT RECOVERY BY EMPLOYERS cont. Companies employing 50 or more employees must have WSP, PTR and ATR approved by relevant Organized Labour structures within the Training forum. 10

11 PIVOTAL GRANTS PIVOTAL grants to the value of a maximum of 10% of levy contributions will be considered for PIVOTAL programmes being defined by NSDS 3 as: Professional, vocational, technical and academic learning programmes that result in occupational qualifications and may include a knowledge component that is normally delivered at Further Education Training (FET) Colleges, or a University, as well as structured learning in an accredited training centre or an approved workplace. PIVOTAL Programmes will be incorporated within the workplace skills plan. The disbursement of a pivotal grant will be after the registration of learners on identified pivotal programmes and will be made in terms of agreed tranches. These grants are reserved exclusively for job seekers/unemployed. 11

12 PIVOTAL GRANTS CONT. If the employer does not claim a mandatory grant within the time period specified in sub regulation (2), the SETA must transfer the employer s unclaimed mandatory grant funds to the pivotal grant fund. A SETA must allocate a pivotal grant to an employer for a learning programme at a level determined by the Director General, through a general circular to all SETAs to fund learners on pivotal programmes, inclusive of funding of University of Technology students and FET College graduates, subject to verification by the SETA to a maximum of 10% of total levies paid by the employer. In addition, subject to sub regulation (1), a SETA may allocate additional pivotal grant funds to an employer for pivotal programmes, should the employer have spent more than 3% of their payroll on training as reported in the pivotal training report and verified by the SETA. This allocation will be based on criteria set by the merseta Governing Board. 12

13 PIVOTAL GRANT TYPES There are four types of grants that can be applied for in this category: Pivotal Grant Types* Value 1 Bursaries for High School graduates seeking post school learning opportunities at FET Colleges (NCV level 2-4) or Universities or Universities of Technology. R per candidate, per annum. 13

14 PIVOTAL GRANT TYPES 2 Structured workplace experience or internships for post-school graduates: 2.1 Diagnostic Assessment for NVC level 4 graduates to identify learning to be recognised when entering into an apprenticeship. R2 000 per candidate 2.2 Access Grants for University of Technology P1 and P2 Diploma requirements and for comprehensive workplace experiential training University linked post-degree internships. P1 or P2: Internships: R per candidate; R per candidate 14

15 PIVOTAL GRANT TYPES 3 Nated Structured Workplace Experience (NWE) Grant for unemployed youth following the Nated curriculum at FET Colleges. This grant is designed to cover 9 months workplace experience linked to the students subject choice before entering into the next Nated level, or entering into an Apprenticeship. Consultation with other SETA s must be undertaken to ensure alignment of workplace training. R per candidate. 4 Apprenticeships and Learnerships NQF 2-4 ending in a trade test Section 13 R112,500, per candidate 15

16 PIVOTAL GRANT TYPES RPL A maximum of R15, per candidate for RPL assessment process A maximum of R12, for GAP training based on submission of GAP training plan and outstanding unit standards. Learnerships (not trade related) R per candidate plus level value to be added on to determine total grant NQF L1 = R per annum per candidate NQFL2 = R per annum per candidate NQF L3 = R per annum per candidate NQFL4 = R per annum per candidate 16

17 PIVOTAL GRANT TYPES To qualify for the 10% PIVOTAL grant, the numbers of candidates applied for must be commensurate with the value of the 10% PIVOTAL grant. Applications in respect of People with Disabilities are strongly encouraged. 17

18 VERIFICATION Ongoing monitoring of implementation of Mandatory and Pivotal grants. merseta will conduct verifications during implementation. merseta needs to ensure that the funding allocated is spent on training. 18

19 CONCLUSION Template change in line with requirements Age profile Scarce and Critical skills requirements of company (research purposes) Pivotal Planning form Pivotal Training report The SMS will be available from 1 April 2012 Assistance - Regional offices/merseta call centre Deadline date for submission 30 June 2012 Other offline facilities 19

20 DISCRETIONARY GRANTS A SETA may determine and allocate a discretionary grant in support of the National Skills Development Strategy, the National Skills Accord and other relevant national priorities detailed in the strategic plan of the SETA as approved by the Minister. A SETA may only commit, beyond each financial year, discretionary funds for learners in pivotal programmes. 20

21 QUESTIONS 21