The signing of the Taxation Laws Amendment Act and the Unemployment Insurance Amendment Act, 2016 has had important implications for employers who have people on ‘learnerships’ on their payroll. These changes impact on the Income Tax deductibility of ‘learnership allowances’ and the imposition of UIF on remuneration paid to learners.
From an Income Tax perspective the period for the learnership allowance has been extended to 31 March 2022 (effective 01 October 2016 and applies to learnership agreements entered into on or after 1 October 2016).
- The tax deduction value will be based on the NQF level of the learner.
- For learners with a qualification equal to NQF level 1 – 6, the employer qualifies for an annual tax deduction of R40 000.
- For learners with a qualification equal to NQF level 7 – 10, the employer qualifies for an annual tax deduction of R20 000.
- For learners with a disability, and a qualification equal to NQF level 1 – 6, the employer qualifies for an additional annual tax deduction of R20 000.
- For learners with a disability, and a qualification equal to NQF level 7 – 10, the employer qualifies for an additional annual tax deduction of R30 000.
In terms of the UIF changes there have been a raft of changes to the benefits payable, but the most important change in this context is the extension of unemployment insurance benefits to learners who are undergoing learnership training. Previously learners were specifically excluded from contributing to UIF. It is not clear whether the learners will need to contribute to UIF to be eligible for benefits, but we would assume that logically they must do.
For info, the other main changes to UIF have been summarised below:
- UIF benefits increased from 238 days to 365 days.
- Maternity leave benefits increased to 66%.
- Payment of maternity benefits will not affect the payment of unemployment benefits.
- Employees who lost working hours due to reduced time at their work places, will be entitled to benefits.
- Families and / or nominated beneficiaries of a deceased claimant will be allowed to receive the deceased’s benefits.
- Charging of fees by any party (e.g. agency) to a UIF claimant for helping them submit their claims, are prohibited.