Articles

SETA Grants

Skills development is a key component of the national strategy to improve the quality and quantity of human capital in South Africa. One of the sources of funding for skills development is the skills development levy (SDL) that employers pay to the government. The SDL is then distributed to various Sector Education and Training Authorities (SETAs) that are responsible for managing and administering the skills development funds in different sectors of the economy.

SETAs use the SDL funds to provide grants to employers and other stakeholders who engage in skills development activities, such as learnerships, apprenticeships, bursaries, internships, skills programmes, etc. These grants can be classified into two types: mandatory and discretionary.

Mandatory grants are grants that SETAs must pay to employers who submit a workplace skills plan (WSP) and an annual training report (ATR) to the relevant SETA. A WSP is a document that outlines the training and development objectives, programmes and budget of an organisation for a specific period. An ATR is a document that reports on the implementation and outcomes of the WSP. Mandatory grants are calculated as 20% of an employer’s leviable amount (the amount subject to SDL). Employers can claim this amount as a deduction from their income tax.

Discretionary grants are grants that SETAs can award at their discretion to employers and other stakeholders who engage in skills development projects that are aligned with the SETA’s strategic objectives and priorities. These projects may include addressing scarce and critical skills in the sector, supporting professional, vocational, technical and academic learning (PIVOTAL) programmes that lead to qualifications or part-qualifications, promoting rural development, social responsibility and transformation, supporting entrepreneurship, cooperatives and small businesses, partnering with TVET colleges, universities and other institutions, etc. Discretionary grants are awarded through a competitive application process that is advertised by each SETA.

Both mandatory and discretionary grants are subject to monitoring and evaluation by SETAs to ensure compliance with the grant conditions and quality standards. Employers and other stakeholders who receive grants must submit progress reports and financial statements to SETAs as required.

SETA grants are therefore an important source of funding for skills development in South Africa. They can help employers and other stakeholders to provide training and development opportunities for their employees and beneficiaries, and to contribute to the National Skills Development Strategy III (NSDS III), which aims to increase access to quality education and training, promote employability and inclusion, support economic growth and social development, foster partnerships and cooperation, advance research and innovation, and enhance system coordination and quality.