What you need to know about the Federal Government wage subsidies to assist with engaging and retaining apprentices

The Federal Government introduced the Boosting Apprenticeship Commencements (BAC) scheme to assist employers to engage apprentices in their workplaces.

The BAC will close on 30 June 2022, however where an employer has engaged an apprentice under the BAC, they may transition to the Completing Apprenticeship Commencements (CAC) wage subsidy for the remainder of their apprenticeship.

The BAC

If you have engaged or intend to engage an apprentice or trainee in the period between 31 March 2022 and 30 June 2022, your business may be eligible for a subsidy of 50% of the apprentice’s gross wages. The subsidy is for a maximum of $7,000 per quarter, per eligible apprentice, for wages paid in their first 12 month period of employment from the date of commencement.

To be eligible, the apprentice or trainee must be undertaking a Certificate II or higher qualification and has a training contract that is formally approved by the relevant State Training Authority.

The CAC

The ongoing subsidy will apply to employers who have received the entire subsidy of the BAC (12 months). Such employers can apply to transition to the CAC.

Under the CAC, a wage subsidy of 10% will be paid to the employer for each eligible apprentice in their second year, up to a maximum of $1,500 per quarter (per apprentice).

Further, under the CAC a wage subsidy of 5% of will be paid to the employer for each eligible apprentice in their third year, up to a maximum of $750 per quarter (per apprentice).

Australian Apprenticeships Incentive System (AAIS)

If employers have missed out on the BAC or wish to engage further apprentices after 30 June 2022, there is another subsidy scheme which will commence on 1 July 2022.

The Australian Apprenticeships Incentive System (AAIS) in its first phase will run from 1 July 2022 to 30 June 2024. The AAIS will provide broad support to the economy through wage subsidies for eligible employers in priority occupations under the Australian Apprenticeship Priority List.

Hiring incentives will also be available for employers of apprentices undertaking a qualification in an occupation that does not qualify for the Australian Apprenticeship Priority List.

From 1 July 2024, following a checkpoint to assess progress, support will be available for priority occupations only, through a mix of employer and apprentice payments, including a hiring incentive for employers; and training support payments for apprentices.

The subsidies available between 1 July 2022 and 30 June 2024 are set out below:

Wage subsidy for employers of Australian apprentices in priority occupations

For employers of new or recommencing Australian apprentices undertaking a Certificate III or higher qualification in a priority occupation on the Australian Apprenticeship Priority List.

10% of wages for first and second year apprentices (up to $1,500 per quarter) and 5% of wages for third year apprentices (up to $750 per quarter).

A wage subsidy for employers of Australian apprentices in priority occupations in regional and remote locations

For employers of new or recommencing Australian apprentices undertaking a Certificate III or higher qualification in a priority occupation on the Australian Apprenticeship Priority List who are located in regional or remote Australia (based on the ABS definition).

Additional 5% of wages for first year apprentices (15% of wages for first year

apprentices (up to $2,250 per quarter), 10% of wages in the second year (up to $1,500 per quarter) and 5% of wages for third year apprentices (up to $750 per quarter)).

Hiring incentive for employers of Australian apprentices not in a priority occupation

For employers of new or recommencing Australian apprentices undertaking a Certificate II or higher qualification in an occupation that is not on the Australian Apprenticeship Priority List or in a Certificate II qualification in an occupation on the Australian Apprenticeships Priority List.

$3,500 paid in two equal six monthly instalments ($1,750 each) after commencement.

Support for Australian apprentices with disability

DAAWS is an incentive payable to an employer who employs an Australian apprentice who satisfies the disability eligibility criteria. DAAWS is also available to employers who employ Australian apprentices who become disabled during their apprenticeship.

To determine your eligibility and to apply for the DAAWS contact your local Apprenticeship Network provider.

 

From 1 July 2024, the AAIS will provide the following for apprentices in priority occupations only:

Hiring incentive for employers of Australian apprentices in a priority occupation

For employers of new or recommencing Australian apprentices undertaking a Certificate III or higher qualification in a priority occupation on the Australian Apprenticeship Priority List.

$4,000 with $1,000 paid at six months after commencement and $3,000 paid at 12 months after commencement.

Useful links

Further information on the apprentice subsidy schemes in this article can be obtained by following the below links:

 

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Author: Cheryl-Anne Laird

Published: 07/06/2022

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