Major Budget changes for employers and Australian Apprentices

31 March, 2022

A number of new initiatives have been announced in the 2022 Federal Budget, including major incentives designed to encourage employers to engage more apprentices and trainees.

From 1 July 2022, the Boosting Apprenticeship Commencements (BAC) and other apprentice support programs , known collectively as the Australian Apprenticeships Incentives Program (AAIP), will be replaced by the Australian Apprenticeships Incentive System (AAIS). The AAIS is designed to improve completions and address skills shortages.

The AAIS will be guided by a new Australian Apprenticeships Priority List (AAPL), which sets out the occupations that reflect a strong current and projected demand. The AAPL will be based on an analysis by the National Skills Commission and updated every year.

The first phase of the AAIS, from 1 July 2022 to 30 June 2024, will provide employers of apprentices with wage subsidies in priority occupations. These will be 10% of gross wages for first and second-year apprentices, and 5% for third-year apprentices.╠ř

Under the Regional Apprenticeships Boost, an additional wage subsidy of 5% will be available for eligible regional and remote employers of first-year apprentices in priority occupations.

Apprentices in priority occupations may be eligible for a direct Australian Apprentice Training Support payment of up to $5,000 over two years, while employers of apprentices in non-priority occupations may be eligible for a $3,500 hiring incentive.╠ř

Additional support is also being made available to women commencing in eligible trade occupations that have historically low rates of female participation. This includes increased access to professional networks, entrepreneurship training, pastoral care and mentoring, and personalised advice and information about career options and pathways.

AAIS payments will change in the second phase from 1 July 2024, with a hiring incentive of up to $4,000 for eligible employers of new or recommencing apprentices in priority occupations. Small businesses will also be able to access a new 20% bonus deduction for eligible external training courses to upskill employees, commencing immediately.

We will provide further Industry Updates as the first phase of AAIS draws closer. In the meantime, you can find out more ╠ř