Bursary & Scholarship
• Section 10(1)(q) of the Income Tax Act 58 of 1962 deals with Bursaries & Scholarships
• The phrase “scholarship or bursary granted” refers to financial or similar assistance granted by an employer (or an associated institution in relation to that employer) to enable an individual to study at a bone fide / recognised educational or research institution
• Such financial aid may be awarded with or without considering academic merit, and would include a bursary which is, in terms of a written agreement, conditional upon the fulfillment of certain stipulated requirements
The individual (grantee) receiving the bursary may be required to:
• obtain a qualification within a certain period,
• or take up employment with the entity / employer (grantor) on completion of the course of study
• The bursary must be made to enable the individual to pursue a course of study for the purpose of gaining or expanding knowledge, aptitude or skills
Two kinds of bursaries exist:
• Open Bursary (i.e. anyone can apply) – no tax implication for the recipient
• Closed Bursary (i.e. only staff can apply) – SARS tax rules and company bursary rules apply.
Learnership
• Section 12H of the Income Tax Act 58 of 1962 deals with Learnerships
• A learnership is a structured learning program (with a legally binding agreement between the Learner and the Employer) during which the learner spends time on the theoretical side (i.e. learning theory) and the practical side (i.e. applying the knowledge in the workplace to gain/improve practical skills).
• The purpose of a learnership is to find ways to address the skills shortfall in SA through Government / Employer initiatives to assist in filling the needs of the SA labour market.
• In order to qualify, it must be related / applicable to that individual’s occupation/job.
• Learnerships are work-based learning programs which result in the participant gaining a registered NQF qualification (i.e. SETA’s are meant to be part of the process!).
A learnership will always have three participants:
- The Learner
- The Employer
- The duly authorised education/training provider.
Minimum requirements for a participant:
- Young people – between 16 and 35.
- Must have completed school, college, etc.
- Unemployed learners MUST have a contract of employment in place for the duration of the learnership (i.e. must have access to practical work experience).