SMEs – Claim Your Incentives for Apprentice Hires

Wondering how to claim your “Employer Incentive Payment”?  Everything you need to know below.

The apprenticeship hiring incentives announced by Rishi Sunak in the Summer Statement have the potential to be transformational for young people and employers alike. Alongside a much-needed cash boost for businesses, the scheme encourages employers to grow their own talent by creating apprenticeship opportunities for young people aged 16-25.

This has now been extended by two months meaning that from 1st August 2020 until 31st March 2021, employers who take on a new apprentice under 25 years old will receive an incentive payment of £2,000. Those hiring apprentices aged 25 and over will be able to claim £1,500. These grants can be claimed through the government’s digital apprenticeship by employers directly.

The apprenticeship service will be new to many employers, especially any that do not pay into the apprenticeship levy. In this guidance we will talk you through everything you need to know when it comes to setting up your account to eventually claiming your incentive payments.

Firstly, lets take a look at what the digital apprenticeship service is. The apprenticeship service, also known as the Digital Apprenticeship Service, or DAS account, is an online platform created by the Education and Skills Funding Agency (ESFA). It is used by employers and training providers to reserve and administer funding for apprentices.

The apprenticeship service was originally designed to enable large employers to manage their apprenticeship levy funds, and is gradually being expanded to help smaller organisations reserve funding for apprenticeships. By April 2021, the aim is for all apprenticeships to be managed via this online system so the sooner you set yours up the better.

Using the apprenticeship service to claim your employer incentive funding

To claim your apprenticeship employer grant, you’ll need to create an account with the digital apprenticeship service.

You can register for an account with the apprenticeship service at any time before your apprentice starts their training which is something we would recommend doing to avoid any delays in your apprentices start date.

To create an account with the apprenticeship service, you’ll need a Government Gateway login for your business, authority to set up a new PAYE scheme on behalf of your organisation, and be able to accept an employer agreement between your company and the ESFA.

Once you’ve got this information lined up, the account registration process is quite straightforward. Check out this video from the ESFA which will talk you through this process.

You can add multiple users to your organisation’s apprenticeship service account so you can include colleagues from other departments if you need to.

Reserving funding for apprenticeships

If you’re a non-levy paying organisation (those with an annual wage bill under £3 million), you are eligible for government funding towards the cost of apprenticeship training fees. This can cover between 95% and 100% of training fees, and is known as “co-investment.” To claim this generous subsidy alongside the employer incentive grant, you will need to reserve apprenticeship funding through the digital apprenticeship service.

You can set this up as soon as you’ve chosen your apprenticeship standard and know which month, you’d like your apprentice to start their training.

Employer incentive payments

According to policy papers, employers will be able to claim their employer incentive grants from 1st September 2020 via the digital apprenticeship service.
To be eligible, your apprentices have to be brand new employees for your organisation and have a contractual start-date between 1st August 2020 and 31st March 2021. They will also need to be inducted onto their training programme during this time. If your new apprentice was part-way through their training and were previously made redundant by another business, you can still claim the incentive as long as they haven’t been employed by you before – which is brilliant news for learners affected by Covid-19 redundancies.

To claim, you’ll need your organisation’s bank account information, and the details of the apprentices you want to claim for.

The apprenticeship employer bonus is split into two equal payments. The first is made after your apprentice has been enrolled on their training programme for 90 days. The second part is paid after they have been learning for a year.

Need more support?

The apprenticeship service offers query handling and technical support via phone, email, SMS, web forms and live web chat. This service, along with a comprehensive range of online help resources, can be accessed via their website.

Here at LMP Education we also have a dedicated team of apprenticeship specialists who are there to support you when it comes to:
– Setting up an apprenticeship service account.
– Advertising and recruiting apprentices into your organisation.
– Upskilling your existing workforce using apprenticeship training.

For more information or support feel free to give us a call on 020 3475 7511 or drop us a email and we will get in contact: info@lmpeducation.org