Apprenticeship Incentives – An Overview

The ESFA originally introduced payments to support employers who hired new apprentices between 1 August 2020 and 31 March 2021. Including £2,000 for 16 to 24-year-olds and £1,500 for those 25 and over.

Apprenticeship incentives have now been extended for a second time following the Chancellor of the Exchequer’s announcement in October 2021. For eligible apprentices of any age who start employment from 1 October 2021 to 31 January 2022, employers will receive £3,000. The apprentice must start their training before 31 March 2022. You can apply for incentive payments for these apprentices from 11 January 2022 to 15 May 2022.

The payment is different to apprenticeship levy funds, so you can spend it on anything to support your organisation’s costs. For example, on uniforms, your apprentice’s travel or their salary. You do not have to pay it back.

The incentive payment is in addition to the £1,000 employers already receive for hiring an apprentice:

• aged 16 to 18 years old
• under 25 with an education, health and care plan or who has been in the care of their local authority

Furthermore, employers will also receive a National Insurance exemption if the apprentice is aged under 25 and a 95% subsidy of the training costs (if not paying via the apprenticeship levy). Levy paying employers can utilise their levy pots.

These incentives are claimed on the Digital Apprenticeship Service, so you will need your organisation’s bank details so the ESFA can pay your organisation directly.

You still have time to apply for a payment of £3,000 for apprentices with an employment start date from 1 April 2021 to 30 September 2021. Applications close on 30 November 2021.

Digital Apprenticeship Service for non-levy employers

Employers can also make up to 10 new reservations. From 1 April 2021, the ESFA reset reservation levels for employers who do not pay the Apprenticeship Levy. This enables employers to make up to 10 new reservations to fund new apprenticeships starting in the financial year 2021 to 2022.

Employers can also reserve funds up to 6 months in advance. From 1 April 2021, the ESFA extended the reservation period for employers who do not pay the Apprenticeship Levy from 3 to 6 months. This means that from 1 April, these employers can reserve funds up to 6 months before an apprenticeship is planned to start.

Eligibility

The deadline for new apprentices who joined your organisation from 1 August 2020 to 31 March 2021 has now passed (31 May 2021). However, you can apply from 1 June 2021 to 30 November 2021 for apprentices who joined your organisation from 1 April 2021 to 30 September 2021. This also includes if you recruit apprentices who have been made redundant. You cannot apply for an existing employee who joined your organisation before 1 August 2020, even if they started an apprenticeship after this date.

How to apply

You can apply for an incentive payment after you have added new apprentices to your digital apprenticeship service account. The ESFA has produced a video step by step guide detailing how to make an incentive claim via the Digital Apprenticeship Service.

When you’ll get paid

This is a direct agreement between your organisation and the ESFA. Payment is made in two equal instalments for each apprentice. The first payment is after an apprentice completes 90 days of their apprenticeship and the second is after 365 days. To receive the full payment, the apprenticeship must last for at least one year. Bacs provides payments on the 14th working day of the month (usually taking three working days to process). After you apply, you can view the estimated payment dates for each apprentice in your digital apprenticeship service account.

You can find out more about our apprenticeships here and some employer resources here.

OUR APPRENTICESHIP PROGRAMMES

We offer a range of accounting and leadership programmes with different entry levels and responsibilities. Click here to find out more.

Please get in touch with Andy Buncall if you need to further discuss your upcoming training needs or want to start progressing starters for any of our apprenticeship programmes.