All at sea with Seta?

Skills development has been identified as a key requirement for economic growth in South Africa, and for the economic empowerment of the previously disadvantaged majority.

As a result, the Skills Development Act (1998) provides a framework for the development of skills in the workplace. Amongst other things, the Act makes provision for skills development by means of a levy-grant scheme, and the establishment of 27 sector-specific Sector Education and Training Authorities – or Setas – to administer the scheme’s funds, and manage the skills development process.

What is a Seta?

The Setas were established in March 2000 and are responsible for the disbursement of training levies payable by all employers in the country. Setas replace and extend the work of the old industry training boards and are accredited by the South African Qualifications Authority.

Each separate economic sector has one Seta. There are 27 Setas which cover all work sectors in South Africa, including government sectors. The members of Setas include trade unions, government and bargaining councils from appropriate industries.

Within its own sector, a Seta must develop and implement a skills development plan, be responsible for quality control and pay out development grants. They are responsible for about R2.5-billion each year.

Part of the objective of the Setas is to ensure that the skills requirements of the various sectors are identified, and that the adequate and appropriate skills are readily available. They are required to ensure that training is of the appropriate quality, meets agreed standards as laid out by the national framework, and caters for the training needs of new entrants to the labour market as well as the currently employed work force.

The Setas are also responsible for a learnership programme and the implementation of strategic sector skills plans. They have discretionary funds, drawn from their levy income, that can be used for projects designed to assist in the achievement of sector priorities, including the design and implementation of learnerships.

The 27 Setas each renew an MoU with the Department of Labour on an annual basis.

What do I have to pay?

A compulsory skills-development levy was introduced on 1 April 2000, payable by employers who are registered with the South African Revenue Service (SARS) for employees’ tax purposes, or by employers with an annual payroll in excess of R250 000. The levy rate is 1% of the total payroll, and the collection of the funds is administered by SARS.

How are the funds disbursed?

The levies paid to SARS are put in a special fund. 80% of the money from this fund is distributed to the different Setas and the other 20% is paid into the National Skills Fund. The Setas then pay grants to employers who appoint a Skills Development Facilitator. The National Skills Fund funds skills development projects that don’t fall under the Setas.

How do I get my Seta to work for me?

Appointing a facilitator

In order to be eligible for grants, an employer must appoint a Skills Development Facilitator who can be a full-time or part-time employee or contracted consultant.

The facilitator is responsible for the development and planning of a company’s skills development strategy. This will include the development and implementation of an annual workplace skills plan and the submission of an annual training report. He or she also serves as a resource to the employer with regard to the criteria required for accreditation of courses, skills programmes and learnership development.

Once a facilitator has been appointed, employers can develop the skills of their staff, and reclaim the funds for doing this in three ways:

Workplace skills plan

In the first year of the levy-grant scheme employers can recover in grants a minimum of 50% of the levy they have paid. The grants, referred to as grants A, B, C and D, have certain conditions that must be adhered to.

  • For the appointment and registration of a Skills Development Facilitator – Grant A – employers will be able to recover 15% of the levy they have paid. The appointment of a facilitator is necessary before applications for Grants B, C and D will be considered.
  • Grant B: An employer will be able to recover 10% of the total levy payment for preparing, submitting and obtaining approval from the appropriate Seta for a workplace skills plan.
  • Grant C: An employer will be able to recover a further 20% of the total levy payment by preparing and submitting an annual training report based on the approved workplace skills plan.
  • Grand D: Each Seta makes available grants to the equivalent of 5% of the total levy payment by the employer for specific sector skills initiatives. The criteria will be made available by the employer’s relevant Seta.

Learnerships

140 learnership programmes have been developed by the Setas, ranging from basic entry level to post professional levels. If employers agree to embark on learnership programmes they will be able to access a cash grant from their Seta as well as a tax incentive. Every time an employer signs up a learnership agreement they can claim R25 000 offset against taxable income. When the recognised phase of the learnership has been completed they can claim an additional R25 000 against taxable income.

Strategic grants

Setas are eligible to provide additional grants to companies for developmental or special skills training, for example, in the area of HIV/AIDS and adult basic education and training.

Tell me more about the National Skills Fund…

The National Skills Fund is administered by the department of labour. It is made up of 20% of the total skills levy paid by employers and is used to address significant national skills priorities.

Funds are allocated through a range of funding windows. The National Skills Authority provides advice on each window and the criteria to be used to determine the allocation of funds.

The principal funding windows deal with strategic projects, social development initiatives, innovation and research, and a bursary programme to support students to study in areas of scarce skills.

Nineteen strategic projects to the value of R1.3-billion were approved over a three-and-a-half-year period by the minister of labour in 2002.

Where can I find my Seta?

The government has contact details for all 27 Setas online.

For more see:
SA Labour Bulletin
Dept. of Labour
Paralegal advice website
Background documents, regulations and other resources

SouthAfrica.info reporter