Changes to the Australian Apprenticeships Incentive System

What’s changing from 1 January 2027? 

Key Apprenticeship Program (KAP) Employer Incentive

• For eligible clean energy and housing construction occupations, an incentive of up to $4,000 (down from $5,000), may be paid in two instalments during the first year of the apprenticeship.

• The incentive will only be available to small and medium employers (SMEs) with less than 200 employees.
• Large employers (with 200 or more employees) will not be eligible, except for Group Training Organisations (GTOs).

Priority Hiring Incentive

• SMEs with less than 200 employers remain eligible for these incentives. The incentive payment will stay at up to $2,500, paid in two instalments during the first year of the apprenticeship.
• Employers with 200 or more employees will no longer be eligible, except for GTO’s .  
• The Australian Apprenticeships Priority List methodology will also change to better reflect national and regional skills shortages and align with government priorities. A more targeted list is expected from 1 January 2027.

What’s staying the same? 

• There is no change to Australian Apprentice incentive payments, including for any apprentices and trainees employed by large organisations.
• Grandfathering arrangements will apply, meaning eligible employers who commence or recommence an apprentice or trainee in the business before 1 January 2027 will continue to receive the current rates, including up to $5,000 for the Key Apprenticeship Program Employer Incentive and up to $2,500 for the Priority Hiring Incentive.