How companies can help employees and their families get an education
NELSON Mandela once said: “Education is the most powerful weapon which you can use to change the world.”
For South African companies that have the resources, there is a great initiative from the government that will allow such companies to help employees and their families get an education.
Education should not be limited to just the rich and powerful. We need to empower a whole generation by giving them the education they need to better their lives.
How company-sponsored bursaries work
For a bursary or scholarship to qualify as a genuine bursary or scholarship (which means it will be tax exempt for the employee), it needs to meet the following requirements:
- Only employees who earn a gross annual salary of less than R600 000 will qualify.
- The bursary or scholarship agreement should state that should the student fail to complete their studies, the bursary amount will be repayable by the employee.
- Bursaries and scholarships for NQF levels 1-4 (grades R-12) are limited to R20 000 a year and for NQF levels 5-10 (including university education), it is limited to R60 000 a year.
Another great thing is that these bursaries are not limited to one per family. If, for example, an employee has three school-going children, they can apply for three bursaries of R20 000 each, provided that this additional R60 000 does not push their annual salary over the R600 000 limit to comply with the rules.
Employers should have a robust policy in place before implementing company-sponsored bursaries. The policy must specify the requirements that should be met and should be based on merit and need.
Education as a human right means that governments have an obligation to protect, respect and fulfil the right to education.
The changes resulting from the bursaries and scholarships will have to be driven internally.
Consultants can be used during the first implementation phase, but after that payroll and HR departments should take the responsibility to ensure that employees’ packages are correctly calculated and have discussions with employees who qualify where all the details are explained, and they are shown detailed examples to ensure that they fully understand the benefits.
Companies should also see this initiative as a way of investing in their own future.
If a company helps employees by providing them and their families with an education, it is cultivating loyal employees in the process.
It also creates a legacy where the employees and their children will have a proper education to improve and work for the company respectively.
Sponsoring the education of staff or their children is a great initiative because change lies in our children and their education.