“I understand that recent BEE amendments now make provision for bursaries to be recognised under skills development. Our company has a bursary programme through which we give two bursaries a year to students. We haven’t in the past been able to recognise these bursaries for skills development purposes. It sounds like this may have changed now? Will we now be able to?”
You have correctly picked up the amendments to the Skills Development Element (Code 300) of the BEE Codes of Good Practice that were published on 31 May 2019 and are effective as of 1 December 2019. Despite only becoming effective from 1 December 2019, businesses can voluntarily elect to be rated in terms of the amended skills development scorecard immediately.
In terms of these amendments to the Skills Development Element, the compliance target for skills development expenditure on learning programmes for black people has been reduced from 6% to 3,5% of the leviable amount as well as reducing the scorecard points from the current 8 points to 6 points. This target includes all external training expenditure for black employees as well as unemployed black persons.
Additionally, the amendments now introduce a new scorecard indicator, namely bursaries for black students at higher education institutions, allocating 4 scorecard points for meeting a target of 2,5% of the leviable amount. Important to note is that the overall Economically Active Population (EAP) demographic representation of black persons in South Africa also applies to the compliance target set for these bursaries and scholarships and will have to be taken into account in the calculation of points.
Bursaries as per the skills development matrix provided in the amended scorecard includes expenditure on institution based theoretical training at accredited training providers registered with the Department of Basic Education or the Department of Higher Education and which will result in the achievement of a degree, diploma or certificate.
Legitimate training cost for bursaries and scholarships include the partial or full payment of school, college and university fees, the funding of text books, the funding for subsistence or accommodation during the period of study as well as stipends paid to bursary holders during the period of the bursary programme.
Expenditure on bursaries and scholarships are however only recognisable for the skills development scorecard if no portion of the bursary or scholarship expenditure can be recovered from the student or if the bursary or scholarship is unconditional. The bursary may however involve the following obligations, namely:
- A requirement for the successful completion of the studies within the allocated time period
- A requirement for continued employment with the business after successful completion of studies, for a period not exceeding the period of the study programme.
Further amendments to the skills development scorecard include the following:
- The compliance target for learnerships, apprenticeships and internships is now set at 5% of the employee head count of each business, with 6 scorecard points available for this category. This will include employed as well as previously unemployed learnerships, apprenticeships and internships.
- more than 25% of the total Skills Development Expenditure. This is an increase from the current 15%.
- The definition of absorption has been amended to exclude further training and only include permanent long term employment after the completion of the learning programme.
From the above changes it does appear that your bursaries for university studies could fall within the scope of the amendments. However, to ensure that you can claim points for your current bursary programme, it would be advisable to work with your BEE advisor or consultant to carefully assess what you can claim and how to optimize your programme for best point recognition on your BEE scorecard.