Transcript Slide 1

INCLUSIVE FLEXIBLE REMUNERATION
PACKAGE SYSTEM (DISPENSATION)
FOR MEMBERS OF THE SENIOR
MANAGEMENT SERVICE(SMS) ON
LEVELS 13 TO 15
Presenter’s Name : D Van Loggenberg
Branch : Regional Office Gauteng
Introduction
Commencement of SMS dispensation
 Compensation of new dispensation commenced on
January 2001.
 Cost-to-employer remuneration system.
 Also referred to as a flexible remuneration system.
 The objectives were to implement and maintain a modern
and flexible remuneration with the view to amongst other
things to enhance departments external equality in
relation to the labour market in order to recruit and retain
SMS members with the necessary skills and
competencies.
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REMUNERATION SYSTEM
 CURRENT REMUNERATION SYSTEM
 Current system comprises of the following elements:
 Basic salary (notch)
 Service bonus
 Employer’s contribution to GEPF
 Employer’s contribution to registered medical aid scheme
 Home Owners Allowance
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Diagram
HOME
OWNERS
ALLOWANCE
EMPLOYERS
CONTRIBUTION
TO
GEPF
CAR
ALLOWANCE
TOTAL
REMUNERATION
PACKAGE
EMPLOYERS
CONTRIBUTION
TO
MEDICAL AID
NON
PENSIONABLE
ALLOWANCE
SERVICE
BONUS
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Draft document: Total remuneration structures of
Magistrates:
 The total remuneration structure should include the following
- Basic salary component of (60% of total package)
- Pension Benefit
- Flexible portion
 The rules relating to structuring of the total remuneration
packages should be similar to those in respect of senior
management position in the public service.
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Composition of the inclusive flexible remuneration
package.
Members who are appointed permanently or on contract
and who are admitted to the Government Pension Fund
(GEPF).
1) The inclusive remuneration package consist of the
basic salary, State contribution to the GEPF and a
flexible portion
2) The basic salary consists 60% of the inclusive flexible
remuneration package
3) The State`s contribution to the GEPF is calculated on
the basic salary
4) The remaining portion of the remuneration package
may be structured
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Flexible Portion
Home owners
allowance
Motor Car
allowance
Medical Aid
Allowance
Medical Aid
Contribution
13th Cheque
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Flexible portion (1)
Motor vehicle allowance
• Maximum amount of 25% of total package (subjected to SARS
maximum reimbursable amounts)
• If structured he/ she is OBLIGED to maintain a reliable vehicle, the
SMS member must at all times have his or her vehicle (or a substitute)
available for official journeys.
• If not structured, there is no obligation to utilize own (private) vehicle for
official purposes.
• Heads of Department (or delegate) can deviate from the above for
official purposes, taking into account practical implications, cost
effectiveness, road conditions etc.
• If structured, SMS members must secure own finance
• Must maintain comprehensive insurance on the vehicle.
• MMS member is responsible for parking fees at the place of work
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Motor vehicle cont.
• As far as possible, an SMS member is obliged to provide free
transport to official passengers to the same destination on an
official journey.
• If an SMS member, who structures a motor vehicle allowance,
utilises private vehicle to carry out official duties, he or she shall be
compensated according to the tariffs payable for privately owned
vehicles as prescribed by the Department of transport and shall
reimburse toll fees.
• MMS member is responsible for parking fees at the place of work
• Any journey between an SMS member's home and work
constitutes a private journey.
• Any journey between an SMS member's home and work
constitutes a private journey.
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•
•
•
•
•
13th CHEQUE
The 13th cheque is an annual payment in the anniversary
month of birth.
The 13th cheque is payable on the day the SMS member is
normally paid his or her salary and allowances
If appointed from outside Public Service a pro rata amount is
paid for the specific period
Calculated from the 1 day of the anniversary month to the
last day before the anniversary month.
Specific conditions for payment of 13th cheque is stipulated
in the policy document for SMS members.
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

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
Medical Assistance
SMS members who are members of registered medical aid
schemes are not obliged to structure for an employer
contribution towards the scheme.
The Executing authority shall pay the total medical aid
scheme subscription fee directly on a monthly basis (Persal)
The Minister of Finance has amended the personal income
tax rates and tax bracket structure with effect from 1 March
2008 for the 2009 tax year.
The Minister of Finance has amended the SARS capped
amounts as follows. (Amendments to the monetary caps for
tax free medical scheme contributions)
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Medical Aid (2)
Membership profile
With effect from 1 March 2008 tax
year
Principal member
R 570 pm (R 6 840 pa)
Principal member plus 1st dependant Additional R 580 pm (R 6 840 pa)
(irrespective the age of the
dependant)
Further dependants (irrespective the
age of the dependants)
Additional R 345 pm (R 4 140 pa)
per dependant.
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Medical allowance (3)
 The amendments to monetary tax amounts has implicit
implications for SMS and MMS members who have the
flexibility to structure for an employer contribution towards a
registered medical aid scheme. This means that of a SMS or
MMS member, who is a member of a registered medical
scheme, decides not to structure for an employer
contribution, he / she is still eligible for the tax benefit based
on the membership profile – therefore the difference
between zero and the appropriate SARS capped amount is
deducted from members income for PAYE purposes.
 Therefore a SMS or MMS member, who is a member of a
registered medical aid scheme, who does not structure for
an employer contribution towards the scheme, still qualify for
the tax benefit based on membership profile, limited to a
maximum of the relevant SARS capped amount.
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Other benefits
Home owners allowance
 The State Guarantee Scheme for housing, as maintained by
the national Department of Public Works, applies to SMS
members.
 Any amount can be structured for home owners allowance.
Non pensionable cash allowance
 Any amount not structured for any of the other amounts has
to be structured as non pensionable cash allowance.
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Amendments to the structuring of the flexible portion
The structuring of the flexible portion of the package may only
be amended in the following circumstances:
 One year after the implementation of the dispensation
 Adjustment of the remuneration scale (i.e annual cost of
living adjustment)
 On transfer to another post
 Substantial changes to tax legislation – Departments will be
informed accordingly.
 Any changes to the total contribution to a registered medical
aid scheme.
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THANK YOU
Accessible and Transformed Justice Services.
Committed to the Promotion of Constitutional Values for
All.
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