Lesson 1, Topic 1
In Progress

3 The Benefits Of Employing People With Disabilities

ryanrori October 12, 2020

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Employers who have adhered to the requirements in terms to reasonably accommodate persons with disabilities within their workplace, have reaped the fruits of their investment in the lives of people with disabilities. The benefits include the talent and productivity they have added to their organisation, as well as benefiting from in terms of increasing their social responsibility and becoming citizens of the world.

Encouraging applications from disabled people is good for an organisation business case. It can help the organisation to increase the number of high quality applicants available; create a workforce that reflects the diverse range of customers it serves and the community in which it is based; bring additional skills to the organisations, such as the ability to use Sign. The costs of making reasonable adjustments to accommodate disabled employees are often much lower as anticipated, but the benefits increasing the bottom line of the organisation. The benefits of retaining an experienced, skilled employee who has acquired an impairment are usually greater than recruiting and training new staff. It is also good for the individual.

1 Compelling Good Sense

Benefits include –

  • Problem-solving skills, as candidates are often incentivised to find creative ways to perform tasks others may take for granted.
  • Dependable, dedicated, hardworking and productive employees, who are often more determined and resolute since they have needed to overcome more difficulties.
  • Increased morale and productivity within the organisation.
  • A more inclusive corporate environment.
  • Employees with disabilities can help the organisation to craft effective marketing strategies to reach this previously untapped sector of the market.
  • By complying with the provisions of the EEA, potential claims of unlawful disability discrimination can be avoided.
  • Retaining employees who have become ill, incapacitated or impaired is often less expensive than recruiting and training new staff.

2 Financial Incentives

Financial incentives are available through the SETA financial incentives, tax deduction., learnership cash grant, strategic cash grants, SMME grants amongst others.

SETA financial incentives – Through the Sector Education and Training Authorities (SETAs) that operate through a levy and grant system, as determined by the Skills Development Levies Act, 97 of 1998 as amended (SDLA) and the Skills Development Levy Act, 9 of 1999. According to the SDL, every employer in South Africa with a payroll exceeding R 500,000 per annum is liable to register for the compulsory Skills Development Levy (SDL). The contribution is 1% of the total payroll (as calculated for the Pay-As-You-Earn (PAYE) tax), including staff who fall below the PAYE threshold, but excluding learners on registered learnership agreements.

Should an organisation be exempt from paying the SDL and fall within the Fasset sector, they are able to register with the relevant SETA as a Non-Levy Paying member. This enables them to participate in specific SETA benefits.  Except employers do not qualify for grants linked to the reimbursement of the SDL (i.e. the Mandatory Grant, Pivotal Grant and the Strategic Cash Grant (SCG)) but do qualify to participate in other Seta benefits such as the Learnership Cash Grant (LCG), Small Medium and Micro Enterprises (SMME) Grant, Assessor & Moderator Grant, Lifelong Learning (LL) events and beneficiaries of Fasset-funded projects.

Tax deductions – Organisations obtain a tax deductions when they train learners on a learnership. However, they have an increased tax deduction for a learner with a disability. The deduction can be claimed on commencement and completion of the learnership. The deductions are available to all learners registered on learnerships, and this tax incentive is not related to the LCG.  The employer may claim a commencement allowance for each year of the learnership; however, the completion allowance may only be claimed by the employer with whom the learner completes their learnership contract.

The commencement allowance must be pro-rated if the learnership is in existence for less than 12 months (and across employers, should the employee transfer from one organisation to another) however the completion allowance may not be pro-rated. It must be claimed in full by the employer where the learner completes the learnership. For each 12-month period of the entire programme completed, an allowance of R 30,000 may be claimed.

For example, if a learnership was two and a half years in duration, a deduction of R 75,000 would be allowable in terms of the commencement allowance (i.e. 2.5 multiplied by R 30,000) whereas only 2 years would be allowable in terms of the completion allowance i.e. R 60,000.

The employer may now claim an amount on commencement and again on completion of the learner per year that they progress through the learnership. An employer may claim a tax deduction of R 50,000 for a learner with a disability. This can be claimed for every year of the learnership for commencement and again a completion amount of R 50,000 for every year of completion at the end of the learnership. This amounts to a total tax deduction of R 300,000.

Learnership Cash Grant – SETAs incentivises organisations employing fewer than 150 employees to employ black learners (defined as African, Coloured or Indian) and/or learners with a disability of any population group on a SETA learnership, by way of a LCG. The LCG is applicable to both levy-paying and non-levy paying organisations. The submission of an approved SETA Mandatory Grant (a combined Annual Training Report (ATR) and a Workplace Skills Plan (WSP)) is a prerequisite for participation for levy-paying members. Non-levy paying (NLP) organisations are required to register with Fasset as a NLP in order to apply for the LCG.

The LCG payment is a payment made on both commencement and successful completion of the learnership and is paid per learner upon approval of the application form, subject to certain criteria. In addition to the LCG, employers may claim the available tax deduction from SARS. The grant amounts change from year to year, and increase for learnerships of a longer duration.

Strategic Cash Grant – Since its inception, the SETAs has incentivised employers to provide training in strategic areas by offering a SCG. A levy-paying organisation with an approved Mandatory Grant can apply for the SCG in order to claim back up to 20% of the levies paid to SARS. The organisation must train black (defined as African, Coloured or Indian) and/or learners with disabilities in certain skills priority areas within a designated training period. Criteria funded in the past (this is subject to change from year to year as per strategic areas decided upon by the specific SETA Management Board):

Specific learners on learnerships.

  • Bursaries to specific unemployed learners to study at recognised institutions or professional bodies in scarce skills areas of study (also available to white women studying towards senior qualifications).
  • Workplace experience, in areas of scarcity in the applicable sector, to unemployed black and/or learners with disabilities from institutions.
  • Quality-assured and structured workplace experience where specific learners enter full-time, on-the-job training (non-learnership).

SMME Grant – SETAs incentivises employers employing fewer than 50 employees to educate and train black learners (defined as African, Coloured or Indian), learners with a disability of any population group, and white women on senior NQF courses (NQF 7 and 8) to study structured educational interventions, at recognised institutions or professional bodies, in areas of study towards addressing a scarce skill in the applicable sector.

The SMME grant is applicable to both levy-paying and NLP organisations. The submission of an approved Fasset Mandatory Grant (a combined ATR and a WSP) is a prerequisite for participation for levy-paying members. NLP organisations are required to register with Fasset as a NLP in order to apply for the SMME Grant.

Project funding – SETAs have different grant structures applicable to learners with disabilities. A number of SETAs fund projects specifically aimed at upskilling learners with disabilities. This project funding is allocated in line with strategic decisions of the Seta Management Board, and is made annually. Fasset Development Projects have always included the recruitment and training of learners with disabilities in the programmes. The projects focus on the training and upliftment of unemployed learners who will enter the applicable sector.

3 Business Case For Employing People With Disabilities

Although any sector in South Africa only employs a very small number of people with disabilities, the type of work performed in the sector lends itself to the training of larger numbers of people with physical disabilities. By recruiting people with disabilities, employers will not only meet real skill needs within the sector, but they may also be able to support national policy and legislation such as Employment Equity targets, Corporate Social Responsibility Initiatives (CSRI) and Broad-Based Black Economic Empowerment (B-BBEE) targets. In addition, employers are able to benefit from higher SARS learnership deductions for each year of the learnership that has been registered and completed. Provided the employer is a levy-payer, the Mandatory Grant can be claimed. The employer may also be able to claim increased LCG amounts for these learners.