22nd September, 2020

Incentivised payments for hiring new apprenticeships

The Government have announced a new bonus scheme to encourage employers to take on new apprenticeships from 1 August 2020 to 31 January 2020.

Employers are offered an incentive payment for hiring new apprentices as part of Rishi Sunak’s “Plan for Jobs” policy, which aims to boost job creation in the UK.

Apprenticeships are an effective way for businesses to grow talent and develop a motivated, skilled workforce. This scheme is therefore a welcome step to help employers continue to offer apprenticeship intakes whilst the economy recovers. This is particularly pertinent for young workers in light of recent statistics showing that workers aged 16 -24 have been the hardest hit by the pandemic with the age group experiencing the biggest drop in employment since March (ONS, 2020).

The terms of the new apprenticeship scheme are as followed:

• From 1 August 2020 – 31 January 2020, employers will receive £2000 for each new apprentice they hire aged 16 to 24 and £1500 for each new apprentice aged 25 and over. The payment is given in two 50% instalments. The first instalment after the apprentice completes 90 days of work, and the second instalment after the apprentice has completed 365 days of work. Importantly, this scheme does not apply to existing apprenticeships hired before the 1 August 2020.
• Unlike the apprenticeship levy fund, employers can choose how they can spend the money to support their business.
• There is no limit on the number of incentive payments that an employer can claim for employing new apprentices provided they meet the above criteria.
• The payment is in addition to the existing payments of £1000 for employers who take on an apprentice aged 16 to 18 or an apprentice under 25 who has an education, health and care plan or has been in care.

For more information please see the UK Gov website.

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