Although some of the restrictions imposed due to the pandemic have now eased, many businesses are continuing to face significant financial hardship.
For some, this means there are difficult decisions to be made regarding taking on new staff and/or retaining existing staff members.
Apprentices and trainees are particularly vulnerable: not only are employers reluctantly considering letting apprentices go, but they’re also failing to take on new trainees, frequently because of concern about affording an additional salary or other training expenses.
Financial help available
The government recognises this and has put in place a series of measures intended to ease the financial burden that a trainee or apprentice might present.
Here we take a look at four different measures that can be accessed by small- and medium-sized companies in order to make hiring or keeping an apprentice more financially attractive.
Note that while there is no limit on the number of apprentices that a business can take on, each apprentice can only qualify for one form of funding from the three detailed below (although different apprentices can be covered under different measures within the same company).
If you need help deciding which measures might be suitable for your business, Pherrus Financial Services can provide expert help and guidance on all aspects of the wage subsidy scheme and related economic initiatives.
1. $21,000 Wage Subsidy (Supporting apprentices and trainees
The $21,000 wage subsidy scheme is a government initiative that will pay half of an individual’s gross salary, up to a quarterly maximum of $7,000, provided they are an apprentice The scheme is live now, and it is intended that it will continue until the end of March 2021.
For a company to get the full $7,000 for three months, the apprentice would need to be earning $1080.00 each week.
It’s essential that as well as working, the apprentices are also engaging in further training or study, delivered by an approved provider.
To put in a claim for this money, your company needs to be defined as either “small” or “medium”.
To be eligible, a small business should :
- Have an eligible apprentice in their employment from 1st July 2020.
- Have less than 20 employees.
Medium businesses need to have less than 200 employees, as well as have an eligible apprentice employed from 1st July 2020.
2. Boosting Apprenticeship Commencements
Similar to the “Supporting Apprentices and Trainees” scheme, the Boosting Apprenticeship Commencements scheme is intended to provide assistance for businesses who are currently considering employing an apprentice.
To qualify for the Boosting Apprenticeship Commencement subsidy, a business needs to employ an apprentice between 5th October 2020 and 30th September 2021.
Up to 50% of an apprentice’s wages can be subsidised, up to a maximum of $7,000/quarter.
The subsidy will be valid for earnings accrued between 5th October 2020 and 30th September 2021 (so the earlier a business takes on an apprentice, the larger the total subsidy sum they will be able to claim).
The study should be Level II or higher in order for the apprentice to be eligible.
The training element needs to be delivered by a government-approved provider (although there is usually no cost to the employer for the training that’s provided).
Whilst it’s important that an apprentice is new to the company where they’re currently employed, they don’t necessarily have to be new to being an apprentice.
Many companies are letting apprentices go, despite the economic stimulus measures the government has put in place.
A company that engages one of these apprentices will still be eligible for the wage subsidy, even if the apprentice has been training elsewhere previously.
3. Payroll Tax rebate
In the same way as any other wages, apprentice wages are usually subject to super and payroll tax deductions.
Under the payroll tax rebate scheme, a total (100%) rebate is offered on the taxes normally paid on apprentice wages.
If the apprentice completes one qualification and then moves on to complete an additional qualification, the rebate can be carried on longer. The rebate is calculated as 5.45% of the apprentice’s salary, in addition to super.
Note that existing apprentices won’t qualify for this scheme. An employer needs to take on a new apprentice, as defined by the Training Services NSW new entrant trainee policy.
In addition, the apprentice will actually need to be employed by the company in order for the wages to be eligible for the rebate.
4. Employer Incentives
Employer incentives are basically cash sums that employers get paid for employing an apprentice who’s studying for one of a range of eligible qualifications. The employer incentive is only available for new apprentices.
The exact amount that will be paid depends on the type of qualification and the age of the employee.
The maximum incentive available is $4,000, which is paid to employers who employ an Australian adult aged 25 or over who is studying for a Certificate III or IV.
The payment is split into two instalments: the first instalment of $1,500 is paid after the apprentice has been in the post for six-months. The remaining balance is paid when the apprentice completes their course of study.
This incentive is primarily aimed at apprentices who are studying higher level qualifications. If you’re considering up-skilling your workforce, or can see the advantages that a highly qualified member of staff could bring, now is a good time to take advantage of the incentives, tax rebates and wage subsidies that are available.
A wide range of courses are available
In many cases, training is provided free to apprentices (it’s paid for by the government).
This means that you could end up with a better-qualified workforce that can add greater value to your operation for a surprisingly modest amount.
Detailed below are some of the courses apprentices can take that qualify for the subsidy, or which can make them eligible for some of the other trainee subsidies.
- BSB30115 Certificate III Business
- BSB30415 Certificate III Business Administration
- BSB40215 Certificate IV Business
- BSB42015 Certificate IV Leadership and Management
- SIT30616 Certificate III Hospitality
- SIT40416 Certificate IV Hospitality
- Certificate III Retail
- TLI31616 Certificate III Warehousing Operations
- TLI41816 Certificate IV Warehousing Operations
- TLI31216 Certificate III Driving Operations
- TLI32416 Certificate III Logistics
Training delivered to fit the needs of your organisation
In order to access any of the above subsidies or incentives, apprentices need to be studying a recognised qualification that’s delivered by a registered provider.
One of the concerns that businesses have about opting for an apprentice that’s pursuing a training qualification at the same time as working is that study will interfere with the apprentice’s ability to work.
Training providers understand how important it is to enable apprentices to be productive, valued members of the workforce, as well as complete their studies.
For this reason, learning is delivered flexibly, often within the workplace. This ensures that the needs of employers and the business are priorities, alongside the need for the trainee to obtain the relevant skills and knowledge needed for their qualification.
One-stop business and finance solution
Pherrus Financial Services can advise on the wage subsidy NSW businesses can apply for, as well as provide further information on the other financial incentives that are available for companies that decide to take on an apprentice or a trainee.
As an established provider of financial and business services to a wide range of organisations, Pherrus has an excellent understanding of the challenges that companies are facing at the current time and the barriers that exist when it comes to hiring an additional member of staff, particularly an inexperienced apprentice.
We can advise on everything from financial management through to structuring your organisation for success, providing a suite of services that optimise the chances of your business not just surviving, but thriving.
As well as advising on economic stimulus initiatives that are specifically directed at apprentices, we can also advise on the measures that the government has introduced to benefit businesses as a whole.
Many of these are time-limited, or require specific financial reporting in order for a company to be eligible.
Pherrus can advise on your options, as well as assist with all aspects of subsidy application and management.
No matter what stage your business is at, or what your goals might be, Pherrus’ expert multi-disciplinary team can provide the seasoned, sensible advice and information you need for good decision-making.
Get in touch to find out more.