How to Claim Your Apprentice Incentive Grant: An Employer's Guide to the Apprenticeship Service

Written on: 17 August 2020

Written by: Frances Hardcastle

Topic

[Employers, Apprenticeship Funding]

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, creating some amazing opportunities for young people to start a rewarding career.

From 1st August 2020 until 31st January 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 service from 1st September 2020.

The apprenticeship service will be new to many employers, especially SMEs. In this blog, we’ll guide you through the system – covering everything you need to know to claim your apprenticeship incentive payment.

What is the digital apprenticeship service?

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.

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.

Register with the apprenticeship service

You can register for an account with the apprenticeship service at any time before your apprentice starts their training. It can be useful to create your digital account early on – around the time you’ve made an offer. This can prevent delays further down the line when you can’t wait to welcome your new apprentice.

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. This screen-capture video from the ESFA takes you through each stage, step by step:

 

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 January 2021. They will also need to be inducted onto their training programme during this time period. 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.

How do the new apprentice incentive grants interact with existing apprenticeship funding?

Most existing sources of apprenticeship funding can be claimed alongside the new employer incentives. This includes:

  • The £1,000 additional payment for employers who take on an apprentice who is between 16 and 18 years old, or has previously been in care. This is paid via your training provider.
  • Government co-investment for non-levy organisations, funding between 95% and 100% of training costs.
  • Levy transfer schemes, which can cover the 5% employer co-investment cost (e.g. West Midlands Combined Authority Levy Transfer Scheme, or Nottingham City Council Levy Transfer).
  • Wage subsidy schemes (e.g. Tees Valley Combined Authority wage subsidy).

With such a variety of funding available, there has never been a better time to take on an apprentice!

What support is available for employers new to the apprenticeship service?

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.

At Baltic, we’re always happy to guide our employers through any problems or questions they may have around apprenticeship funding or their digital account. Feel free to get in touch with our friendly and helpful team!

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