Incentive payment for hiring a new apprentice

The government’s Plan for Jobs will help to kickstart the nation’s economic recovery. In recognition of the value apprentices can bring to our economy, an incentive payment will be made to employers who hire an apprentice between 1 August 2020 and 31 January 2021.

The apprentice must be a new employee to the business, have a contract of employment start date between 1 August 2020 and 31 January 2021 (inclusive) and must not have been employed by the employer within the six months prior to the contract start date.

Claims can start to be made by employers in relation to these apprentices from 1 September 2020. Those claims must be made through the apprenticeship service.

There will be two levels of payment based on age:

• For apprentices aged 16-24 the payment will be £2,000
• For apprentices aged 25 or over the payment will be £1,500.

The payment will be made directly to employers in two equal instalments, where the apprentice is still in learning at day 90 and day 365.

There will be no limit on the number of incentive payments that an employer can claim for apprentices eligible to receive funding, provided each apprentice meets the criteria, including being a new employee.

Support for young apprentices aged 16-18

The government is committed to an apprenticeship programme that supports young people into quality apprenticeships and it recognise that for employers who take on young apprentices aged 16-18 years old, there are some additional costs associated with supporting them in the workplace. For example, research on apprenticeships for 16-18-year olds suggests that these apprentices can require significantly more supervision and pastoral care.

When employers take on a 16-18-year-old on an apprenticeship standard, they receive £1,000 to help meet the extra costs associated with this. This will be paid to employers in two equal instalments at 90 days and 365 days.

These payments are made to employers via their training provider, who will pass the money on. These payments come direct from the government and will not be deducted from an employer’s account.

Support for care leavers and those who have a Local Authority Education, Health and Care plan

Apprentices aged 19-24 who have previously been in care or who have a Local Authority Education, Health and Care plan may need extra support and the government recognises this can represent an extra cost to employers.

Employers who train an apprentice who is aged 19-24 and has previously been in care or who has a Local Authority Education, Health and Care plan, will receive £1,000 to help with these additional costs in the same way as the payment for 16- 18 year olds.

These payments are separate from, and therefore in addition to, the incentive payments for hiring a new apprentice, which are paid directly to the employer through the apprenticeship service.

High quality traineeships for young people

The government will provide an additional £111 million this year for traineeships in England, to fund high quality work placements and training for 16-24 year olds.

For the first time ever, the government will fund employers who provide trainees with work experience, at a rate of £1,000 per trainee.

The government will improve provision and expand eligibility for traineeships to those with Level 3 qualifications and below, to ensure that more young people have access to high quality training.

Kick-start Programme

The government has introduced a new Kickstart Scheme, a £2 billion fund to create hundreds of thousands of high quality 6-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment.

Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.

Participants can expect to receive £455 per month if they are under 18 years of age, £645 per month if 18 to 20, and £820 per month if 21 to 24. In return, employers will essentially receive government-paid employees for six months.

The hope is that, by alleviating the costs of employing and training young (and typically less experienced) adults, businesses will be incentivised to take on young adults in this fragile economic climate. The scheme will be enforced by Jobcentre Plus, who will act as a sort of matchmaker, allocating successful applicants for appropriate placements.

There will be no cap on the number of placements and the scheme will be open to funding applications from August 2020, with the first jobs are expected to begin in the autumn.

However, young people taking part in the programme cannot also be apprentices.