Trade Support Loans for Apprentices

From July 1st 2014 the Australian government commenced a loan scheme to support those doing an apprenticeship known as Trade Support Loans. Under this scheme apprentices in eligible occupations can be granted a loan of regular instalments up to $20,000 to cover everyday expenses whilst completing an apprenticeship. There is no means testing or restrictions on what the funds can be used for. Currently an apprentice can borrow $8,000 in their first year, $6,000 in the second, $4,000 in the third and $2,000 in the final year of the apprenticeship. If the apprenticeship is completed then a 20% discount is applied to the loan balance.

Repayment of the loan is administered in the same way as HELP loans for university studies. Once the apprentice earns over the HELP repayment threshold (currently $54,126) they will be required to make compulsory repayments ranging from 4-8% of adjusted taxable income. If an apprentice declares to their employer that they have an outstanding trade support loan then the employer is required to withhold additional tax to cover the compulsory repayment in the same way as the current HELP repayment system.

 

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