Financial support for employers that train apprentices
17 June 2020
A new government subsidy will provide $1,000 per month to the employer for a first-year apprentice, and $500 per month for up to eight months for a second-year apprentice. It applies to both new and existing apprentices and will run for 20 months.
During lockdown, Master Plumbers lobbied hard for financial support for employers that train to prevent a decline in apprentice numbers. We welcome this new funding, which recognises the associated cost and financial risk to businesses.
"Unlike other forms of study, such as university courses, apprentices can’t do their training without an employer. But training an apprentice is a big cost for small businesses, and many are reluctant to take on the risk, particularly at times of economic uncertainty," said CEO Greg Wallace.
Master Plumbers have advocated for many years for employer funding to take on apprentices and we want to see this available on a permanent basis—not just during the COVID economic recovery phase. Currently, only 10% of construction sector businesses take on apprentices and we believe ongoing financial support would help boost these stats.
"Prior to lockdown, our industry was seeing about 102 plumbing apprentices gaining employment a month. It’s plummeted to just 10 per month since COVID-19 hit."
Wallace says the subsidy will do a lot to reduce some of the financial burden for employers.
"This is a lot more valuable for growing apprenticeships than free fees, because free fees does nothing to help the employer-it is only a benefit for the apprentice, as the majority pay their own training fees."
"While free fees will be a welcome saving for the apprentice, the harsh reality is that without a tradesperson willing to employ you as an apprentice, you have no job, or training, or fees to pay," he says.
The apprenticeship support scheme will be available from this August and will run for 20 months, to April 2022. More details about how to apply will be available nearer the time.
Have questions about what this means for your business? The government has provided the following Q&A about the Apprentice Boost scheme on their website:
How much do employers receive for having an apprentice?
The initiative runs for 20 months, with an employer getting $1000 per month for a first year apprentice and $500 per month for a second year apprentice.
This means an employer could get a maximum of $16,000 for an apprentice who is starting their training (12 months at the first year rate, and 8 months at the second year rate). Employers will receive $12,000 per full year of training for each first year apprentice, and $6,000 per full year of training for each second year apprentices. They may receive less than the full year amount depending on where in their training each apprentice is. For example, if a first year apprentice is already 9 months into their training, they will receive 3 month’s support at the $12,000 per year rate (i.e. $3,000) before shifting to the second year rate of $6,000 per full year of study.
How is an employer eligible?
An employer will be able to receive this support if they employ an eligible apprentice (i.e. 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).
Will there be priority industries that are eligible?
No. There are no priority industries for this support.
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 new and existing apprentices, if they are eligible.
What do you mean 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.
You can read the official announcement here.