Changes to Australian Apprenticeships Incentive System from 1 January 2026

fftitc
20 hours ago
2 min read

The information below has been summarised and presented by our CEO, Tony Palladino and provided to the FFTITC Board. We thought that it might be useful information for a wider audience, so have included it in Nimble News.

The Government advises that from 1 January 2026, the Australian Apprenticeships Incentive System will be updated to better target support for priority industries and national workforce needs. A new Key Apprenticeship Program Employer Incentive (KAP) will provide up to $5,000 to employers of apprentices in KAP-listed occupations, paid in two instalments during the first year.

For apprentices in Priority List occupations (excluding KAP occupations), the Australian Apprentice Training Support Payment (AATSP) will reduce from $5,000 to $2,500, paid across two years. Likewise, the Priority Hiring Incentive for employers will decrease from $5,000 to $2,500, paid in the first year.

Core supports such as the Key Apprenticeship Program, Living Away From Home Allowance, Apprentice Support Loans and disability-related assistance will remain unchanged. Apprenticeships commenced before 1 January 2026 will continue under existing higher “grandfathered” rates.

Further information:

W: https://www.apprenticeships.gov.au

W: https://www.dewr.gov.au/australian-apprenticeships

Relevance: Changes may indirectly affect trades connected to construction-related supply chains, including timber and related occupations.

The following provides a dollar value comparison: current vs. new incentives:

1. Employer Incentives

Priority Hiring Incentive (Current → New)

Incentive	Current (to 31 Dec 2025)	New (from 1 Jan 2026)	Change
Priority Hiring Incentive	$5,000	$2,500	–$2,500

New Key Apprenticeship Program Employer Incentive

Incentive	Current	New	Change
KAP Employer Incentive	Not currently available	$5,000	+ $5,000

2. Apprentice Incentives

Australian Apprentice Training Support Payment (AATSP) (Current → New)

Incentive	Current	New	Change
AATSP	$5,000	$2,500	–$2,500

Key Apprenticeship Program (Apprentice Payments)

Incentive	Current	New	Change
KAP Apprentice Payments	Up to $10,000	Up to $10,000	No change

3. Other Supports (No dollar value change)

These payments remain unchanged under the new system:

Living Away From Home Allowance (LAFHA)
Australian Apprenticeship Support Loans (AASL) – up to $25,983
Disability Australian Apprentice Wage Support (DAAWS) – $216.07/week
Tutorial, Mentor & Interpreter Assistance – up to $5,500/year each

4. Grandfathering

Anyone who commences before 1 January 2026 continues to receive the current higher rates:

$5,000 AATSP
$5,000 Priority Hiring Incentive

Below are two documents - a summary of the Federal Government - Comparison of Current vs. New Apprenticeship Incentives (Commencing 1 January 2026) and the official Key Apprenticeship Flyer from the Commonwealth Government.