BBBEE Bursaries and the impact of EAP Targets

On a B-BBEE (Broad-Based Black Economic Empowerment) scorecard, bursaries play an important role in the Skills Development element. Companies earn points by providing bursaries to Black South Africans who study at institutions registered with the Department of Higher Education. These bursaries count toward the company’s skills development spend, which is required to be 2.5% of the company’s annual payroll (leviable amount). By offering bursaries, particularly in critical skills areas, a company can improve its B-BBEE score, thereby enhancing its overall compliance and empowerment level.

The Impact of EAP Targets on Bursaries

The Economically Active Population (EAP) targets significantly affect how points are allocated for bursaries on the B-BBEE Scorecard. It's essential for companies to apply the correct EAP targets when planning their bursary spend. There are specific EAP targets for each province, as well as national EAP targets for companies operating in more than one province. These targets are further divided by gender and various racial demographics, including African, Indian, and Coloured. Focusing on EAP targets helps promote equity and supports broader transformation goals by increasing educational opportunities for these groups.

Requirements for a B-BBEE-Compliant Bursary

To qualify on the B-BBEE scorecard, a bursary must provide financial assistance to students to support their education. Typically, bursaries are awarded based on financial need, academic merit, or specific eligibility criteria, such as belonging to a historically disadvantaged group.

The costs covered by a B-BBEE bursary can include partial or full payment of course fees, laptops, textbooks, other learning materials, food, and accommodation during the period of study.

However, according to the B-BBEE Codes, a company cannot claim bursary spend if certain criteria are not met:

1. Scholarship and bursary expenses for black individuals don’t qualify as Skills Development Expenditure if the company can recover the funds or if there are conditions attached. The grants must be given to students at schools or universities recognized by the Department of Basic Education or Higher Education & Training.
2. If the recovery conditions or responsibilities of the employee include either of the following, the expenses can still be counted:some text
   1. Successfully completing their studies within the given timeframe.
   2. Remaining employed by the company after completing their studies for a period that doesn’t exceed the duration of their studies.

Evidence Required for Verification

To verify bursary spend under the B-BBEE framework, companies need to provide the following evidence:

• Invoice within the measurement period.
• Proof of payment.
• Proof of registration of the institution at the Department of Higher Education and Training (DHET).
• Proof of registration of the learner at the institution.
• A Bursary Agreement, ensuring the conditions align with those outlined in the BEE codes.

Closing the Gaps with Expert Guidance

Engaging with a B-BBEE Advisor can help develop strategies and action plans to address any compliance gaps and improve your overall B-BBEE rating. For more information or assistance, contact Elevate Advisory Partners at info@elevateadvisory.co.za.

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