IT IS well known that education is the ladder out of the pit of poverty.
But the many who need education the most will never get it due to the cost.
According to research conducted by Ernst and Young, the professional services firm, requests for study loans increase every year, at the start of the year.
This indicates that Mzansi has a huge thirst for education but that money is a barrier to many – parents also need to pay for uniforms, stationery and books as well as school fees.
The Education Benefit is a way parents can cover some of the costs of education as employees.
A recent update in the Income Tax Act allows employers to make a positive difference in the lives of their workers’ children.
Through the act, parents can ask their employers to deposit a portion of their salary before tax into an education fund, which reduces the taxable salary.
Terms and conditions
- The employee must earn less than R600 000 a year.
- The employee must earn more than R78 150 which is above the tax threshold minimum.
- The employee must be financially responsible for the education costs of the same child or children’s education who will be beneficiaries of the benefit.
- The child or children must be studying at a recognised and accredited educational institution
The advantages of the benefit
With the Education Benefit, qualifying employees and employers reduce taxable income for individuals without increasing the costs to the employee.
In order to minimise the administrative burden of implementing this benefit, Spark Schools, with Ernst and Young, will help organisations use this benefit with minimal effort and allow everyone to focus on more critical areas of the business.
The ideas behind the benefit
The two ideas that motivated the benefit were:
- Ways to increase access to quality education which teaches children to excel academically and practically.
- How to encourage parents and employers to make their children’s education a priority without creating even more expense for all parties involved.
For more information about the Education Benefit and how parents and employers can implement the benefit, email Nomfundo Chirwa at firstname.lastname@example.org or visit www.sparkschools.co.za/