New apprenticeship scheme introduced

Australian Apprenticeships Incentive System will replace existing wage subsidy arrangements

From July 1, 2022, a new apprenticeship wage subsidy scheme will come into effect, replacing all existing incentives introduced in the past couple of years.

The Australian Apprenticeships Incentive System, announced in the latest Budget 2022-23, will cost the Government $365.3 million and is designed to continue incentivising and assisting employers to take on new or recommencing apprentices.

However, the new wage subsidy rate will go down significantly from 50 per cent previously to as low as 10 per cent for the first year of employment, and is dependent on the occupation and geographical location.

It will also be delivered in two phases, the first of which will commence from July 1, 2022, and the second to commence from July 1, 2024.

In the first phase, there will be three tiers of wage subsidies:

Apprentices in priority occupations and in regional or remote locations – 15 per cent of wages for first year (up to $2250 per quarter), 10 per cent in second year (up to $1500 per quarter) and five per cent in third year (up to $750 per quarter)
Apprentices in priority occupations but NOT in rural or remote areas – 10 per cent of wages for first year and second year (up to $1500 per quarter), and five per cent in third year (up to $750 per quarter)
Apprentices NOT in priority occupations - $3,500 paid in two equal six-monthly instalments ($1,750 each) after commencement.

The full list of priority occupations can be found on the Australian Government Department of Education, Skills and Employment website, which contains a total of 77 occupations including stonemason, agricultural technician, bricklayer, carpenter and more.

The priority occupation list will be updated on a yearly basis.

In addition to wage subsidies for employers, the new system also provides incentives for Australians to take on an apprenticeship.

In the first phase, these incentives include:

A support payment of $5000, paid over two years ($1250 every six months) for Australian apprentices training in a priority occupation
Living away from home allowance for the full three years consisting of payments of $77.17 per week for the first year, $38.59 per week in the second year and $25 per week in the third year
Support Loans of up to $21,779 (2021-22) over the course of the apprenticeship.

From July 1, 2024, a total wage subsidy of $4000 will be paid to employers taking on apprentices in a priority occupation only. The payment will be divided into two parts - $1000 paid at six months after commencement and $3000 paid at 12 months.

For Australian apprentices, the incentives in phase two are as follows:

A support payment of $3000, paid over two years ($750 every six months) for Australian apprentices training in a priority occupation
Living away from home allowance for the full three years consisting of payments of $77.17 per week for the first year, $38.59 per week in the second year and $25 per week in the third year
Support Loans of up to $21,779 (2021-22) over the course of the apprenticeship.

According to the Federal Government, the new scheme is expected to help an extra 35,000 apprentices and trainees get into a job.

“By backing 385,000 apprentices in their training, we’re boosting the pipeline of workers Australia is going to need for a stronger economy and a stronger future,” Prime Minister Scott Morrison said in a media statement.

“These programs deliver certainty for business so they can go and hire another apprentice chef, another apprentice hairdresser, another apprentice plumber. It is about getting Australians skilled and into jobs right now.”

According to the statement, as of March 24, 2022, over 73,000 businesses have been supported to put on an apprentice or trainee through the Boosting Apprenticeship Commencements subsidy announced two years ago.

New apprenticeship scheme introduced

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