On 1 July 2018, the NSW Government officially launched its new fee free apprenticeships program. Delivered as part of the Smart and Skilled program, the Government will pay the qualification fee, up to $2,000, for 100,000 new apprentices who commence their training on or after 1 July 2018.

The NSW Government’s Smart and Skilled program offers subsidised training for courses on the NSW Skills List. It should be noted that traineeships are not covered under the program and that only approved Smart and Skilled training providers are eligible to offer the fee-free option.

How are training providers reimbursed?

When a student enrols in an apprenticeship, the qualification fee is often paid by the student or the employer direct to the training provider. However, in the case of the fee free apprenticeships program, the NSW Department of Industry will pay the qualification fee on behalf of the eligible apprentice directly to the Smart and Skilled training provider.

As with other subsidies paid through the Smart and Skilled program, it appears the Government will pay the qualification fee to the training provider over a period of instalments, based on the completion of certain milestones by the apprentice.

Measuring the impact on your business

There are both pros and cons of the fee-free program for training providers who offer eligible qualifications.

On the positive side of the equation, the Government has invested heavily in promoting the initiative and is, according to its published statements, undertaking the funding of apprenticeships in order to grow the skilled workforce. This promotional activity is aimed at both potential students and employers who are looking to take on staff.

Apprenticeship enrolments have been falling and this is no doubt a way for the Government to entice people back into this form of study. We would hope that, as a result, more people start enrolling in apprenticeships, which is good for the training providers that offer these qualifications.

However, from a practical point of view, businesses that rely on upfront fees to maintain cashflow may be disadvantaged because of the drawn-out instalment payments.

Further, the fee free offer is for apprenticeships only, as opposed to other types of vocational education pathways that may be more relevant in certain industries. Not all training providers are likely to see an uplift in student enrolments.

If you’d like to speak with an expert in accounting for Registered Training Organisations, who can help you identify the impact of fee-free apprenticeships on your bottom line, contact us today.