Based on the requirements set out in the Trade Support Loans Act 2014, this report provides a summary of the administrative operation of the Trade Support Loans Programme (TSL) from 1 July 2014 to 30 June 2015.
The Australian Government’s Better Support of Australian Apprentices policy included the introduction of TSL which provides Australian Apprentices with up to $20,000 over the course of their apprenticeship as an income contingent loan.
The Trade Support Loans Programme aims to meet the Government’s commitment to deliver improved productivity and competitiveness to the Australian economy by providing highly skilled individuals in priority trades where there are growing skills shortages.
The Trade Support Loans Bill 2014 received Royal Assent on 17 July 2014 and the programme commenced on 21 July 2014. The Programme is legislated under the Trade Support Loans Act 2014 (the Act). The programme is delivered jointly through Australian Apprenticeships Centres (Apprenticeship Network providers from 1 July 2015), the Department of Education and Training and the Australian Taxation Office (ATO).
Apprentices commence repaying their loan through the tax system when they start earning a sustainable income of $53,345 in 2014–15 and $54,126 in 2015–16. Apprentices may also choose to make voluntary payments on the loan prior to reaching the repayment threshold. The loan amounts are highest in the early years of training to support apprentices while their wages are lower.
Trade Support Loans of up to $20,000
Annual limits of payments to Australian Apprentices:
- $8,000 in year one
- $6,000 in year two
- $4,000 in year three
- $2,000 in year four and beyond
Current apprentices are able to opt-in for a Trade Support Loan in line with the year of their apprenticeship. The loans provide flexibility to meet the needs of each individual and an apprentice may borrow up to $20,000 over four years. Apprentices who successfully complete their apprenticeship will have the amount of their loan reduced by 20 per cent. In the 2014–15 financial year 751 apprentices successfully completed and received a completion discount. Apprentices repay the loan when they meet the relevant income threshold. The Trade Support Loan debts are indexed annually with the Consumer Price Index to maintain their real value.
The programme provides financial support to eligible Australian Apprentices to assist them with expenses associated with living, learning and completing an apprenticeship and helps them focus on completing a trade qualification. To be eligible for Trade Support Loan payments, Australian Apprentices must:
- reside in Australia and be an Australian citizen, or the holder of a permanent residency visa
- be undertaking one of the following:
- Certificate III or IV level qualification that leads to an occupation on the Trade Support Loans Priority List
- Certificate II, III or IV agricultural qualification specified on the Trade Support Loans Priority List
- Certificate II, III or IV horticulture qualification specified on the Trade Support Loans Priority List, while working in rural or regional Australia
- meet the eligibility criteria outlined in the Trade Support Loans Programme Guidelines.
At 30 June 2015, 26,608 Trade Support Loan applications have been received and processed, with 145,461 payments made to apprentices.
|Total number of Australian Apprentices assisted through Trade Support Loan payments||26,608||59,500|
Chart 1: TSL Applications received – 2014‑15
This chart shows that the TSL has received applications at a constant rate throughout the year (represented as total received at each month from July 2014 to June 2015).
Chart 2: Number of TSL payments made – 2014‑15
Chart 3: Number of TSL Applications received by Apprentice stage – 2014‑15
This chart shows that during 2014–15 the TSL received progressivity less applications from each apprenticeship stage (represented as number of applications received from each of the categories: year 1, year 2, year 3 and year 4)
Chart 4: Number of TSL Applications received by state/territory – 2014‑15
This chart shows the number of TSL applications received by the state or territory of origin – NSW, VIC and QLD have each contributed significantly more applications than the remaining states or territories