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Financial boost for apprentices and their employers
Beginning this month, apprentices and their employers will start receiving much needed support through the Apprenticeship Boost Scheme.
The $380.6 million Apprenticeship Boost is part of the Government's wider Apprenticeship Support Programme — a cross-agency response which aims to help employers retain and bring on people into formal industry training including apprenticeships while dealing with the effects of COVID-19.
Apprenticeship Boost aims to help employers keep first and second year apprentices so they can continue to earn and progress towards their qualifications. This will also help ensure New Zealand has a pipeline of skilled workforce and help avoid skills shortages in the future.
Employers with an apprentice in their first year will be eligible for $1,000 support per month, and employers with an apprentice in their second year is eligible for $500 per month for a maximum period of 20 months.
For employers to be eligible for this support, their apprentices need to be enrolled in a New Zealand Apprenticeship or Managed Apprenticeship programme approved by the Tertiary Education Commission (TEC). Subsidy payments will be made to the employer, who must continue to pay the relevant minimum or training wage to their apprentice.
Apprentices are our future
"Apprentices are our future," says Kim Milne, General Manager, People and Culture at AB Equipment, a machinery and heavy equipment company employing over 60 apprentices across their 20 centres nationwide.
"Having apprentices ensures we will have the essential skills in the future to service and maintain the machines and equipment we provide for our customers," says Ms Milne.
"During these tough financial times, this Government support will help us maintain our current apprenticeship programme and continue our search for enthusiastic new recruits," Ms Milne adds.
Graham Malungahu, one of AB Equipment's apprentices says "I'm very pleased that the Government is offering more support for me and my employer".
"It certainly gives me better job security during these unsettling times," says Graham.
"In terms of AB Equipment, not only will this fund assist them to support my training, it will hopefully enable them to hire more apprentices which will help prepare our industry for the future," Graham adds.
Photo: AB Equipment apprentice Graham Malungahu (left) with AB Equipment General Manager, People and Culture, Kim Milne
Strong demand
"Demand for trades training and apprenticeships has strengthened since the Government announced its initiatives to strengthen vocational training," says Gus Gilmore, chief executive at the Manukau Institute of Technology (MIT)
"At MIT, semester two enrolments has been strong with a particular focus in trades," says Mr Gilmore.
MIT has been working with employers and union groups to assist people into training and to ready them for a change in sector or vocation.
"We have also been holding open sessions where prospective learners and their whānau can come and know more about trades and other vocational pathways," says Mr Gilmore.
"Over 50 percent of our students are Māori and Pasifika, and our Māori and Pasifika trades training has been promoted to our communities and has had good uptake," he adds.
An enormous incentive
Nigel Philpott, chief executive of Primary Industry Training Organisation (Primary ITO), says "for many people and businesses, cost is a barrier to training, and this fund would be an enormous incentive."
"We are getting a great deal of interest from industry and we're making sure businesses, trainees and apprentices we work with have the information they need to avail of this support programme," says Mr Philpott.
"We're also getting in touch with businesses that have previously done training with us and encourage them to think about doing it again," he adds.
Mr Philpott says "this financial support for employers to take on and retain apprentices will help stimulate a highly-skilled and engaged primary sector workforce for the future."
Having the desired impact
Warwick Quinn, chief executive of the Building and Construction Industry Training Organisation (BCITO) says, "We are experiencing a strong rise in the level of enquiry and sign-ups due to both 'free trades training' (TTAF) and the Apprenticeship Boost scheme which shows these initiatives are having the desired impact.
Mr Quinn says BCITO has processed over 2,100 apprenticeship applications just in the past few weeks, more than double the number of sign ups in the same period last year. In addition, around 1,500 more applications are in the pipeline and yet to be processed.
"In the past, for every one employee who is laid off, four apprentices have been laid off, so as a sector we must 'step up to the plate' and do our part to ensure we continue to grow skills and avoid the skill shortages we inevitably face when the economy rebounds," Mr Quinn adds.
Big increase in new apprentices
The Skills Organisation, New Zealand's largest industry training organisation which manages apprenticeships in the electrical, plumbing, roofing and scaffolding industries, has seen a big increase in new apprentices for the months of June and July 2020.
"If we compare our numbers from June and July this year with the same period in 2019, we have seen an increase of over 200 percent for registered apprentices," says Garry Fissenden, CEO of Skills. "Of those, 85 percent are brand new to apprenticeship training.
"Then, if we look at the number of employers signing up, again we have also seen a jump, with 237 new employers taking on an apprentice since 1 June 2020. And those employers are from across the board in terms of industries – from electrical, plumbing, roofing and scaffolding."
Employers can apply for the Apprenticeship Boost subsidy through the Ministry of Social Development (MSD) from 5 August. Information on the application process is available on the MSD website.
The government's Apprenticeship Support Programme also includes the expansion of MSD's Mana in Mahi programme, support for seven existing Group Training Schemes through the TEC and the new Regional Apprenticeships Initiative, funded through the Provincial Growth Fund, which will support employers in the regions to take on new apprentices.
FAQs for providers
The initiative:
What is Apprenticeship Boost?
Apprenticeship Boost is a payment available through the Ministry of Social Development (MSD) to support employers of apprentices in their first or second year of training. Employers can receive up to 20 months of support with payments of $1,000 per month in apprentices' first year, and $500 per month in their second year.
When will Apprenticeship Boost start?
Apprenticeship Boost will run for about 20 months starting in August 2020 to April 2022. Applications will open on 5 August through MSD's Work and Income website.
What is the goal of Apprenticeship Boost?
The goal of the ABI is to help employers retain and bring on new apprentices as New Zealand recovers from the impacts of COVID-19. Specifically, it will help employers to keep first and second year apprentices employed and training towards their qualification. The Apprenticeship Boost will provide support to employers to meet the costs of retaining apprentices, or hiring new ones, in their first 24 months of their programme of study.
What is MSD's role in this initiative?
The Ministry of Social Development (MSD) is responsible for the Apprenticeship Boost, and its key role is to receive employers' applications, process them and make the payments.
What is TEC's role in it?
The Tertiary Education Commission (TEC) will support MSD by verifying an employer's eligibility and confirming the number of months of training the apprentice has completed.
What apprentices are eligible?
To be eligible the apprentice must be actively training towards a New Zealand Apprenticeship (through a transitional ITO) or a TEC approved Managed Apprenticeship through a provider. The apprentice also must not have completed more than 24 months study towards any apprenticeship.
Why aren't other employers with different types of apprentices allowed to get the payments?
Support will be available to employers of first and second-year apprentices in all New Zealand Apprenticeships and TEC recognised Managed Apprenticeships. The payment targets these apprentices as they are earlier in their training pathway and therefore more likely to be vulnerable to redundancy during economic downturns.
For Transitional ITOs and Managed Apprenticeship Providers:
What will be the role of transitional ITOs and providers in Apprenticeship Boost?
There are a few things you can do that will support this process running smoothly:
Make sure all the data for apprenticeships that you provide to TEC is up-to-date and accurate so we can ensure that we can match with the data that employers submit to MSD
Process new enrolments for apprenticeship as promptly as possible
Help out where you can with enquiries from employers whose applications haven't been successfully processed because the data they have submitted doesn't match the data in TEC's system
Where should I direct further questions from employers about the AB?
MSD are leading the Apprenticeship Boost programme and are best contact point for employers.
Will I have to update the data we send to TEC more frequently?
For transitional ITOs there will be no change to data reporting. Please keep the ITR as up-to-date as possible.
For providers there will be some small changes. There is a new template for Workspace2 and the reporting schedule on this will be supplied directly to providers that have been approved by TEC to deliver managed apprenticeships.
Do I need to change the privacy statement on our training agreements as information is now being shared with MSD?
No. Employers will need to get their apprentices to sign a consent form as part of the application process. This will cover the changes in privacy arrangements and enable TEC and MSD to share information.
How will ABI affect other TEC funding paid to TEOs for apprenticeships?
ABI won't affect any other TEC funding TEOs are currently receiving from TEC. ABI payments will be made directly by MSD to employers.
If an apprentice's training is on hold, is their employer still entitled to the ABI subsidy?
TEC will advise MSD when an apprentice's enrolment is on hold. Payments will not be made when we have reported an apprentice as on hold.
Does an apprentice's previous study or training impact their eligibility?
Yes possibly.
If an apprentice has been enrolled in other apprenticeship programme previously this will count against their months of eligibility.
If the apprentice has enrolled in other vocational training that is not an apprenticeship this will not impact their eligibility.
How does previous study or training count against eligibility?
Every month will count where there is a record of an active apprenticeship enrolment on the last day of a month. "Active" means the enrolment is not on hold, or has been withdrawn or completed.
If I am a training provider who hasn't offered Managed Apprenticeships in the past, can I start now?
No, at this point in time TEC does not want to see growth in Managed Apprenticeships. The reason for this is that as the transition to RoVE occurs we (a) do not want to complicate/confuse things for employers or apprentices, and (b) RoVE is about creating a collaborative vocational education system rather than one that is competitive. Our continued message is that it is business as usual, which means employers signing up apprentices with relevant transitional ITOs.
If I get more demand for delivering Managed Apprenticeships, can I deliver more EFTs than I previously indicated?
No, Apprenticeship Boost is about supporting your current apprentices, and not growing these. The reason for this is that as the transition to RoVE occurs we (a) do not want to complicate/confuse things for employers or apprentices, and (b) RoVE is about creating a collaborative vocational education system rather than one that is competitive. Our continued message is that it is business as usual, which means employers signing up apprentices with relevant transitional ITOs.
Who/where should I send all my questions to?
Please send your questions to customerservice@tec.govt.nz.
FAQs for apprentices
How will my privacy be protected?
Your employer will request you sign a consent form before sharing any information with MSD. This consent form clearly outlines what information will be shared between MSD and TEC. MSD and TEC will share information to help determine if you are eligible for Apprenticeship Boost. The information will be shared securely.
What should I do if I change employers?
Please make sure you let your transitional ITO or Provider know about any changes in employment status as soon as this occurs.
What should I do if I put my training on hold?
Please get your employer to notify MSD if you put your training on hold. It is also important to let your transitional ITO or provider know.
What should I do if I no longer want to do my apprenticeship?
Please get your employer to notify MSD if you withdraw from your training. It is also important to let your transitional ITO or provider know.
What should I do if I'm concerned about the payments I received from my employer?
The wages you receive are part of your agreement with your employer. If your employer is doing something that you think would make them ineligible for Apprenticeship Boost payments, please let MSD know. Subsidy payments will be made to your employer who must continue to pay you the relevant minimum or training wage. Where an apprentice is not being paid the minimum wage or training wage, they should approach the Ministry of Business, Innovation and Employment to lodge a complaint with the Employment Inspectorate as this is a breach of employment law.
Will I receive Apprenticeship Boost payments directly?
Apprenticeship Boost payments will be paid to your employer.