APPRENTICESHIP SUBSIDY SCHEME

A new subsidy, Apprenticeship Boost, aims to support employers and apprentices as the economic recovery from Covid-19 continues

On 17 June, the Government announced it will provide employers with up to $16,000 a year to help pay the cost of each apprentice for the first two years of
their apprenticeship.

“Apprenticeship Boost is part of a wider government programme to keep apprentices in jobs and support employers to invest in new ones, as we rebuild the economy from the impact of Covid-19,” said Education Minister Chris Hipkins.

For the 20 months from August 2020 to April 2022, up to an estimated 18,000 employers will be able to apply for funding of up to $12,000 per apprentice in their first 12 months of training, and up to $6,000 in their second 12 months. The Government has budgeted
$380.6 million for the scheme.

Benefits to employers, apprentices and planned projects

As well as the obvious direct benefits to the employer and apprentices, Hipkins explained the scheme is intended to ensure there is sufficient skilled labour to undertake projects planned to support the recovery from the economic effects of Covid-19.

“This investment is key to helping businesses keep people on and give them more confidence to take on new apprentices. This is essential as we roll out and fast track infrastructure projects.

“Without support of this kind after the Global Financial Crisis, apprentices were let go and, when the economy picked up, New Zealand struggled with huge skills shortages and had to pay more to find skilled people from overseas.”

Paul Southey, builder, Registered Master Builders President for the Wairarapa region, and member of the Wairarapa Economic Development Group, believes the Apprenticeship Boost scheme is a necessary initiative that will encourage builders to take on new apprentices and retain existing ones.

“The subsidy scheme is a good one. Taking on an apprentice is a valuable commitment that builders make to the future of our industry, but it often isn’t immediately financially rewarding for the employer. It takes a few years before an apprentice is generating income, so this scheme will undoubtedly help encourage builders to take on and retain apprentices, especially with the economic effects of Covid-19 putting more financial pressure on the employer.”

Nevertheless, Southey believes there is more that can be done to encourage people into trades.

“In my experience, there is a still a theme in high schools that trades are second-best to further academic study. I think as an industry, we need to form stronger links to high schools, polytechs and Gateway programmes, to let people know there is a strong future in trades. That’s something we are actively working on here in the Wairarapa.”

Part of a package

The Apprenticeship Boost scheme dovetails directly with the previously announced Free Trades Training – featured in the previous issue of Under Construction – through which apprentices’ educational fees are waived for the next two and a half years, regardless of which year of the apprenticeship they are in. It also forms part of a wider Apprenticeship Support Programme, which also includes:

• Mana in Mahi – expanding the existing programme that supports at-risk people through an industry training pathway (including apprenticeship and pre-apprenticeship training) and into long-term sustainable work.
• Group Training Scheme support – funding to ensure the existing seven schemes remain viable by enabling them to continue to employ apprentices and trainees and provide related services to
  host businesses.
• Regional Apprenticeships Initiative – support for displaced regional apprentices who have lost their jobs, initially focusing on Māori and Pacific Peoples (funded through the Provincial Growth Fund).

Employers will be able to access support from either the Apprenticeship Boost, Mana in Mahi, or the Regional Apprenticeships Initiative (depending on the type of apprentice or pre-apprentice trainee they employ). Mana in Mahi and some Regional Apprenticeships participants will get a higher subsidy to reflect the different level of need of the individual apprentices, or pre-apprentice trainees, involved.

Q & A

How much is the Apprenticeship Boost subsidy?

All employers who have an eligible apprentice will be able to receive a base subsidy rate up to $12,000 per annum ($1,000 per month) for first-year apprentices and up to $6,000 per annum ($500 per month) for second-year apprentices. The amount an employer gets for each apprentice may vary, depending on when the apprenticeship started. For example, for an apprentice three months into their apprenticeship, the employer will be entitled to $1,000 per month for nine months and $500 per month for the next 11 months.

How is an employer eligible?

An employer will be able to receive this support if they employ an eligible apprentice (ie, one that is enrolled in a Level 4 New Zealand or Managed Apprenticeship programme and is in the first or second year of this apprenticeship).

How will the funding be used?

This support is a wage subsidy paid to the employer per eligible apprentice. The employer is required (by law) to continue to pay the apprentice at least the minimum wage or training wage. The employer will therefore top up this subsidy amount and continue to pay
the apprentice the wage they are legally entitled to.

Is it for new apprentices only?

No. The Apprentice Boost is available for all apprentices, in their first and second year.

What is meant by an ‘apprentice’?

Someone who is enrolled in a TEC-approved NZ or Managed Apprenticeship and are in the first or second year of this apprenticeship.

When can I apply?

Now. Apprenticeship Boost became available in August 2020 and runs for 20 months. Employers can apply for Apprenticeship Boost whether an apprentice has just started their training programme or is nearing the end of their first two years – right up until the apprentice has completed 24 months of their training programme (while the initiative is running).

How do I apply?

Go to: workandincome.govt.nz/work/apprentice-support