Backing businesses to upskill New Zealand
The Government is providing businesses with up to $16,000 to help pay the cost of each apprentice for the first two years.
“The apprenticeship support scheme, Apprenticeship Boost, is part of a wider government programme to keep apprentices in jobs and support employers to invest in new ones, as we rebuild the economy from the impact of COVID-19,” Education Minister Chris Hipkins said.
“Apprentices are significant investments for firms, particularly in the early years of their training, and can be the first to be laid off when companies have to tighten their belts.
“This investment is key to helping businesses keep people on and give them more confidence to take on new apprentices. This is essential as we roll out and fast track infrastructure projects.
“Without support of this kind after the Global Financial Crisis, apprentices were let go and when the economy picked up, New Zealand struggled with huge skills shortages and had to pay more to find skilled people from overseas.
“From August 2020 and up to April 2022, up to an estimated 18,000 employers will be able to apply for funding of up to $12,000 per apprentice in their first 12 months of training, and up to $6,000 in their second 12 months.
“The Government has budgeted $380.6 million for Apprenticeship Boost, which was announced on Budget Day. We’ve also removed costs for learners and made apprentices free for the next two and a half years,” Chris Hipkins said.
The Ministry for Social Development will be responsible for administering the scheme.
“Supporting people to stay in jobs and enter into training requires a cross government response so it makes sense that MSD has a key role to play. We need to keep apprentices connected to work, connected to training and connected to their communities,” Minister of Social Development Carmel Sepuloni said.
“MSD has shown through its administration of the Government’s wage subsidy that it’s well placed to support businesses in a timely and effective manner to help keep kiwis working,” Carmel Sepuloni.
Carmel Sepuloni adds that the support is critical to ensuring that our people and businesses continue to develop the skills needed for New Zealand’s economic recovery and rebuild.
Apprenticeship Boost is a cornerstone of the Government’s Apprenticeship Support Programme, Chris Hipkins said. Employers of apprentices will also have targeted financial support available from three other schemes depending on the circumstances:
- Extending the existing MSD Mana in Mahi scheme ($30.3 million) for at risk people into long-term sustainable work
- A new regional apprenticeship scheme which will invest in new apprenticeships in regional New Zealand and particularly support displaced workers and Maori and Pacific peoples into jobs,
- $19 million to support the seven existing Group Training Schemes to continue to employ some 1,700 apprentices and trainees and provide related services to host businesses.
Q+A for Apprentice Boost
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.