Published on April 30, 2020
A Guide to the New Apprenticeship Initiative
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For many years, the Australian government has offered the Australian Apprenticeships Incentives Program (AAIP), offering employers a financial incentive to provide apprentices with opportunities in order to combat skills shortages.
It also offers young people living away from home allowance (LAFHA) to support them if they must move from their parent’s home to undertake their apprenticeship. However, as from 1 July 2020, this program will be replaced with a new apprenticeships initiative, the Incentives for Australian Apprenticeships (IAA). Some elements of the program, like the LAFHA, remain the same, yet some aspects are different in an attempt to streamline incentives.
What does this new apprenticeship program entail?
Since skills development is in high demand, there are now additional financial incentives for both businesses and apprentices to help with the cost of training, compared to the previous program. The number of payment categories has been limited to 14 instead of 31, making it easier for employers and apprentices to understand the incentives available to them.
What are the financial incentives for businesses?
The amount of money you receive depends on various criteria, though for all eligible employers of apprentices, who are taking a Certificate III or higher, can earn $1,500 on commencement which is paid after six months of the apprenticeship. The employer will also receive an extra $2,500 once the individual finishes their apprenticeship. If the apprentice is an already existing employee, this is only applicable if they work in an area of national skill need. More information on what’s considered a ‘national skill need’ can be found on the federal government website.
Keep in mind that the National Skills Needs List will be reviewed and possibly altered before this new initiative commences.
Some other important points to consider here:
- If the apprentice is working in a rural region and/or an Australian school-based apprentice, the employer will receive an extra $1,500 over the course of the apprenticeship
- If the apprentice is over the age of 21 and working a job that is listed on the National Skills, you will receive an additional $4,000 at the twelve-month point of the apprenticeship
- If the apprentice is a disadvantaged worker aged 45 years and over, you can receive an extra $1,500 over the course of an apprenticeship.
Once you’re ready to employ an apprentice, you will need to contact your Australian Apprenticeship Support, the Network provider.
What support is there for disadvantaged apprentices?
If you’re an apprentice who is struggling financially, you may be eligible for a base commencement and completion incentive up to $1,500. There are additional incentives if you fulfil specific criteria, for example:
- For disadvantaged workers aged 45 years and over, they can receive an extra $1,500 over the course of the apprenticeship
- For apprentices employed by a Group Training Organisation, they can earn an extra $750 upon completion
- For apprentices undertaking an Australian School-Based Apprenticeship, they can earn an extra $1,500 upon commencement
Who’s an eligible employer/apprentice?
This is a bit of a complicated matter. Many factors come into play here, though the main requirements are as follows:
- The apprentice is currently undertaking an Australian apprenticeship in a state or territory in Australia
- The apprentice is employed under a training contract, which is signed by the apprentice and the employer and is approved by the STA
- The apprentice is undertaking an accredited training program for a nationally recognised qualification, which will lead to paid work
- The apprenticeship is at a Certificate II, III, IV, Diploma or Advanced Diploma level
- The apprentice must be an Australian citizen, an individual with permanent residency status or a New Zealand passport holder who had lived in Australia for six months at least
- The employer must not offer employment by a private household
- Employment guarantees a regular salary to its employee
- The employer and the employee must not have prior business arrangements e.g.: the apprentice is a partner in the employer’s business
To confirm your eligibility, contacting your Australian Apprenticeship Support is the best way to do so. They must find you eligible before you can proceed. Also, it is important to note that these incentives are also subject to waiting periods and time limits.
As you can see, there’s plenty of financial support if you’re a struggling apprentice or an employer looking to hire one. If you’d like to learn more about apprenticeships and what is needed to secure a position, here’s a handy guide that will give you all the relevant information.
For further information regarding the incentives in general, consider contacting your AASN provider.
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