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Apprenticeship funding rules and the new incentives payments - a Starting Off guide

Rishi Sunak’s new 2021 budget has undoubtedly made an impact on the world of apprenticeships. The introduction of larger, extended incentive payments presents a tempting opportunity to many employers… but how do they work? At Starting Off, we have broken it all down for you!

Apprenticeship funding rules

There have not been any changes made to the apprenticeship funding rules. Large employers will still be funded from their levy accounts, non-levy companies can receive 95% funding and smaller organisations (49 staff or less) employing 16–18-year-old apprentices will be fully funded.

In addition to these funding rules, employers can also receive £1,000 per apprentice aged 16-18-years-old.

In an effort to increase employment after the devastating effects of COVID -19 and to encourage organisations to take on more apprentices, the government introduced some new apprenticeship incentive payments in August last year. These were due to end in March 2021, however, in the latest update, it was announced there is both an extension to the deadline and an increase in the amount employers can receive.

The incentive payments

In a nutshell, the new 2021 rules mean that after 1st April 2021, employers can receive £3,000 per apprentice recruited until September 2021. This is in addition to existing £1,000 for apprentices recruited that are 16 – 18 years of age.

Currently, employers can receive incentive payments for apprentices they have hired between 1st August 2020 and 31st March 2021. The deadline for applying to this funding is 31st May 2021 and the amount employers can get will depend on the age of the apprentice:

If the apprentice is 16-24 years-old, employers can receive £2,000.

If the apprentice is 25 years or older, employers can receive £1,500.

Still feeling confused? Use this chart to help make sense of the new incentives and help you determine which cash incentives you could get, in addition to the usual apprenticeship funding and employer benefits.

Read more about employer benefits here

To apply for incentive payments, employers must do this through their own apprenticeship account. To learn how you can watch the helpful video below or contact a member of our team. For apprentices hired between 1st August 2020 and 31st March 2021, you will need to hurry – the deadline for applications closes 31st May 2021. For hires after 1st April, you can apply for your funding from 1st June 2021.

Watch the video on applying for incentive payments here

In order to secure funding for your apprenticeship, non-levy employers now have to set up an apprenticeship account and reserve the funding for their apprentice prior to sign up – when you start an apprentice with us, your account manager will provide you with a guide on how to do this.

To take advantage of these new incentive payments and learn more about how you as an employer could benefit from taking on an apprentice, contact our team at Starting Off. We can advise you on the best apprenticeship course to fit your role and match you up with your ideal candidates.

Contact us now