Get started with an apprenticeship loan

apprentice 150x150 Get started with an apprenticeship loanAustralia’s youth is choosing university study over apprenticeships, which has led to a national skills shortage across a range of key trades. This is bad news for the economy, but great news for tradies. The combination of skills shortages and government incentives present substantial opportunities for job seekers to find employment in industries that can offer long-term and rewarding careers.

Our current skills shortage is due to declining interest in the commencement of apprenticeships and a high dropout rate mainly due to a lack of commitment and funding. Completion rates for apprenticeships in Australia are currently low, with more than a third of apprentices not completing their trades as reported during the 12 months to 30 June 2015.

The future growth of our economy is dependent upon having a skilled and appropriately trained workforce. In an attempt to increase apprenticeship completion rates and, in turn, strengthen our skilled workforce and the economy, Australians of all ages can apply for a ‘Trade Support Loan’ from the federal government.

These loans are available across a wide range of industries on the ‘National Skills Needs List’ such as the automotive, construction and food industries, with positions for plumbers, diesel mechanics, bricklayers, electricians and pastry cooks highly sought after.

What is a ‘Trade Support Loan’?

A ‘Trade Support Loan’ may provide apprentices and trainees studying in skills needs areas with a loan of up to $20,000 (over a 4-year period) to assist in funding living expenses and education costs. To be eligible for this loan, apprentices must be studying either full-time, part-time or be school-based (Cert III or IV qualifications) in an area on the ‘Trade Support Loans Priority List’. Existing apprentices can also apply for a loan in line with the year of their apprenticeship.

The loans are indexed annually with the Consumer Price Index (CPI), are interest-free and are only required to be repaid once the apprentice has started earning an income of more than $50,000 per annum.

The apprentice can decide how much money they borrow (up to annual limits) and what the money is spent on, e.g. work gear, living expenses such as rent, or even a second-hand car. They can opt out of the loan at any time, but the outstanding amount must be repaid as per the terms of the loan.

Further incentives

As further encouragement, apprentices receive a 20% discount on the loan when they successfully complete their apprenticeships.

Pass this on

To opt in for a ‘Trade Support Loan’, an application must be completed and lodged. More information is available from the local Australian Apprenticeship Support Network provider on 13 38 73 or by visiting www.australianapprenticeships.gov.au.

If you know of someone who needs a hand starting or completing an apprenticeship, pass on this information or contact a licensed financial adviser on (07) 3040 4840. It could be their first step to a great career!


Disclaimer:

The advice on this site may not be suitable to you because it contains general information that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.  Please also refer to our general advice warning under contact us tab on our website.  The article is based on information available at the time of writing only and therefore care should be taken as to the accuracy of the content.

Image courtesy of [ vectorolie] at FreeDigitalPhotos.net

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