Summit’s MD, Matthew Lambert answers some burning questions about the latest updates to the allocation of bursaries for black students and higher education institutions.
Q: How has the allocation amount changed?
A: The allocation amount for expenditure regarding bursaries is changing. According to the codes of good practice about BBBEE, published in the Government Gazette (42496), the most notable change is a specific allocation towards expenditure for bursaries for black students at higher education institutions.
Q: What does the update make allowance for?
A: The update allows for a weighting of four points and a compliance target of 2.5% as a leviable payroll percentage. This applies specifically to the Skills Development expenditure for bursaries for designated students at higher education institutions. Additionally, there are four points allocated within the generic scorecard which account for 20% of the total points (excluding bonus points) available within the Skills Development scorecard, that is allocated specifically to higher education bursaries.
Q: How do we define a higher education institution?
A: As per the interpretations and definitions [Section 9(1)] of the codes of good practice, a higher education institution is defined under the Higher Education Act of 1997 whish states that a higher education institution is any institution that provides higher education on a fulltime, part-time or distance basis and which is; a) merged, established or deemed to be established as a public higher education institution under this Act; b) declared as a public higher education institution under this Act; or c) registered or provisionally registered as a private higher education institution under this Act.
Q: What this tells us is that expenditure on bursaries can be at both private and public higher education institutions?
A: Absolutely, yes.
Q: What constitutes skills development expenditure under paragraph 184.108.40.206, in the Act?
- Legitimate training costs for a bursary or scholarship including payments towards the school, college or university fees, or a portion thereof; funding for textbooks or other learning materials and funding for subsistence or accommodation during the period of study.
- Salaries or wages paid to an employee participating as a learner in any Learning Programme that constitutes Skills Development Expenditure if the study programme is a learnership, internship or apprenticeship (categories B, C, and D, respectively). This applies to the Learning Programme Matrix or a stipend linked to a bursary programme in terms of paragraph 220.127.116.11.
- Expenses for scholarships and bursaries for designated groups do not constitute Skills Development Expenditure if the measured entity can recover any portion of those expenses from the employee, or if the grant of the scholarship or bursary is conditional.
Q: Are there any conditions governing the application of bursaries?
A: Despite the aforementioned information, the bursary is not deemed to be conditional as long as the following obligations are adhered to:
- The responsibility of successful completion in their studies within the time period allocated;
- Or the requirement of continued employment by the measured entity for a period following successful completion of their studies is not more than the period of their studies.
Q: Are there specific programmes to consider for bursary recipients?
A: These conditions highlight some great programmes to look at when allocating bursaries, namely traineeship-based programmes which allows the learner to study while working. With Summit this can be conducted either online or part-time during employment and with access to a stipend amount for continued service that mirrors the duration as their study period.
Q: Do both parties benefit from the agreement/bursary?
A: These programmes are highly beneficial for both the learner and the employer:
- The learner gets the opportunity to gain experience in both practical and theoretical accumulation of knowledge, thus providing the best opportunity to gain formal work experience.
- The obligatory work-back mechanism is a form of assurance for the business to protect their investment.
- The applied stipends can leverage the Employment Tax Incentive (ETI) provided that the learners meet the specific requirements for this incentive.
For further information on the Skills Development Codes, bursary management or our traineeship programmes, reach out to us at Summit.