Federal apprenticeship payment changes ‘carefully calibrated’ to favour employers in housing and energy

The federal government retains housing and new energy sector apprentice employer incentives, while other industries will face halved support.

Key Apprenticeship Program prioritised

The government confirmed that it will retain the rate of support for employers of apprentices who are training in Key Apprenticeship Program (KAP) occupations. It said: “This payment recognises the role employers play in developing the skilled workforce needed to meet clean energy and housing targets.”

KAP is made up of two streams: the New Energy Apprenticeship (NEA), supporting Australian apprentices in the clean energy sector, and the Housing Construction Apprenticeship (HC), supporting Australian Apprentices in housing and construction.

Before 1 January 2026, employers who hired apprentices under the Priority Hiring Incentive received $5,000 paid in two instalments during the first year of their worker’s apprenticeship. This incentive has been reduced for employers of apprentices engaged outside KAP, but on the priority list of occupations, to $2,500.

Incentives continuing in 2026

For apprentices in occupations within KAP, full-time apprentices will now receive $10,000, and full-time employers will continue to receive $5,000. This $10,000 full-time payment will be made in instalments of $2,000 at six, twelve, 24, and 36 months and on completion, with part-time workers to receive half of this amount.

The federal government confirmed that there will be no changes to support payments for apprentices and their employers who commenced their training before 2026 – they will continue to receive $5,000 for the Australian Apprentice Training Support Payment and $5,000 for the Priority Hiring Incentive.

In a strategic review of its Australian Apprenticeship Incentive System, the federal government said that it aims to address the declining completion rate of apprentices over several years, the Department of Employment and Workplace Relations website said.

This news comes amid the federal government’s Future Made in Australia plan to meet net zero targets and to build 1.2 million homes by 2029.

‘A system that reflects today’s economy’

Minister for Skills and Training, Andrew Giles, said these changes have been “carefully calibrated” towards housing and new energy occupations.

The NSW Minister for Skills, TAFE and Tertiary Education, Steve Whan, said: “We want a system that reflects today’s economy and helps more people get the skills they need for good jobs, especially in the regions and in industries crying out for workers.”

The NSW government said its review of the Apprenticeship and Traineeship Act 2001 aims to improve outcomes – particularly for young people in regional NSW – and support more apprentices and trainees to complete their training.

According to the not-for-profit jobs and skills council, Skills Insight, these new changes will “reshape how financial support is distributed across different occupations, with impacts on many of the industries we support”.

Concerns for other priority areas

The Business Council of Australia (BCA) said it welcomes the continuation of incentives for apprentices in the energy and housing sectors; however, it is concerned that the reduction of incentives in other areas will reduce overall apprenticeship numbers.

BCA chief executive Bran Black (pictured) expressed concerns for other priority sectors that have received reduced support, including care, broader construction, and digital; risks that Black believes will “[undermine the] development of the workforce in industries already facing critical shortages.”

“One in three occupations are in shortage, so we need more support, not less, for the apprentices and employers building Australia’s future workforce,” Black said.

“The evidence is clear: when wage subsidies fall, apprenticeship commencements drop; when support increases, commencements and completions rise, strengthening the long-term skills pipeline,” Black said.

“Australia’s largest businesses achieve completion rates close to 90 per cent, far above the 50 per cent national average. Backing these high-performing employers to expand will lift commencements, completions and the skills Australia needs.”