Fri 12 Sep 2014

Subject to passing legislation, from 1 July 2014 the Government will offer loans of up to $20,000 over the life of an apprenticeship to apprentices who are undertaking a Certificate III or IV level qualification that leads to an occupational outcome on the priority list. If legislation is not in place by 1 July 2014, the Programme will commence as soon as legislation is passed.

These loans are designed to ease financial burden and help increase apprenticeship completion rates.

Like HELP loans for tertiary students, the loans will be repayable once apprentices are earning a sustainable income.

The Trade Support Loans will specifically target occupations on the National Skills Needs List such as plumbers, diesel mechanics, electricians and fitters as well as well priority areas in horticulture and agriculture with more than 100 qualifications eligible.

It will provide real support for current apprentices to complete their skills training and provide a stronger incentive for young Australians to become apprentices.

Amounts of support that may be available

Eligible first year Australian Apprentices may receive up to $8,000, second year $6,000, third year $4,000 and fourth year apprentices $2,000.

Australian Apprentices who complete their qualification will receive a 20 per cent discount on their loan. The loan will be repayable through the tax system once apprentices are earning a sustainable income, $53,345 per year.

The Trade Support Loans Programme will provide more than $1.9 billion in loans which is around double the support that would have been provided under the Tools for your Trade measure.

Around 20 per cent of trade apprentices drop out by the end of their first year and 30 per cent drop out by the end of the second year. That is why loan payments are heavily weighted to the first two years of the apprenticeship, when wages are at their lowest.

MEGT Australian Apprenticeships Centre will administer the Trade Support Loans Programme. Australian Apprentices will be able to check their eligibility for a Trade Support Loan through their local MEGT Australian Apprenticeships Centre from June 2014.

Employers and apprentices can access more information at: http://www.australianapprenticeships.gov.au/trade-support-loans

Eligibility

There will be terms and conditions as well as eligibility criteria for these loans. To date (4 June 2014), the information available on eligibility is as follows.

The loans will be available to apprentices undertaking a Certificate III or IV qualification leading to a number of trade occupations on the National Skills Needs List, such as plumbers, diesel mechanics, electricians and fitters as well as well priority areas in horticulture and agriculture with more than 100 qualifications eligible. However not all apprentices who are currently eligible for TFYT will be eligible for Trade Support Loans as the eligibility criteria is slightly different.

School-based and/or part time apprentices may be eligible – subject to meeting the criteria.

Eligible Australian Apprentices will be required to provide their Tax File Number to their Australian Apprenticeships Centre in order to receive the Trade Support Loan.

More information on eligibility will be provided soon.

Payment information

To date (6 June 2014), the information available on payments is as follows.

Payments will be available in the three month probationary period, as long as the apprentice qualifies for and claims payment.

Apprentices will opt in for a six month payment period with payments made in arrears on a monthly basis. The opt-in will allow apprentices to receive the next six Trade Support Loan payments that fall due. Following this, the apprentices will be required to opt-in again to receive further payments.

Apprentices can also opt-out of receiving payments at any time.

The income of an Australian Apprentice will not impact on their eligibility for loans.

Unlike the Tools For Your Trade payment arrangements, Australian Apprentices will not be able to claim payments retrospectively and there will be no waiting period to claim. Apprentices will not be able to claim payments for instalments that have passed (except in very rate circumstances, such as administrative error).

Apprentices will only be able to claim the next instalment that falls due after they apply. They will not be able to claim instalments that occurred in the past except in very rare circumstances (see above). Apprentices will not have 12 months to claim.

Apprentices will only be able to claim payments while they are undertaking their apprenticeship. If an apprentice completes before the end of four years, their payments cease on completion, even if they have not received the full $20,000. Apprentices will not be paid out the remaining balance on completion.

The loans will be spread over the four years of an apprenticeship, diminishing as wages increase so that maximum support is provided in the initial years when most needed.

These loans will be paid monthly, with most of the money available in the early years of an apprenticeship.

Read the Media Release from the Hon Peter MacFarlane MP

Media release 4 June 2014