Extra financial incentives to recruit young people
2015 will bring about changes to National Insurance Contributions for young people and Apprenticeship Grants for Employers.
Last December’s employment statistics revealed that, whilst overall unemployment is down, the labour market position of young people seems to have declined in the last quarter with the number of young people not in employment, full-time education or training up by 30,000.
However, there are now some extra financial incentives from the Government which, combined with Creative Employment Programme's grant funding, could make it easier for employers to recruit young people in 2015.
1. National Insurance Contributions abolished for apprentices
George Osborne announced in his 2014 Autumn Statement that National Insurance Contributions (NICs) will be abolished for all but the highest earning apprentices under the age of 25. The change will only come into effect from April 2016 for companies who employ apprentices at less than the upper earnings limit (£815 per week from 2015/16).
This is an extension to the announcement made at last year’s Autumn Statement which abolished NICs for all under 21s from April 2015 (whether undertaking an apprenticeship or not).
2. Changes to the Apprenticeships Grant for Employers
Another change to apprenticeships coming in to effect in 2015 is that the Government’s employer incentive – the Apprenticeship Grant for Employers (or AGE grant) – has revised its eligibility criteria.
- From 2015, the AGE grant will only be available to employers with less than 50 members of staff instead of 1,000.
- As before this is only for companies who are new to apprenticeships or haven’t enrolled a new recruit or existing employee onto an Apprenticeship programme in the previous 12 months.
- Employers can now only be paid a maximum of 5 grants in total as opposed to the previous 10.
This is slightly different in London: from 1st January 2015 to 30th June 2015, the Apprenticeships Grant for Employers will be enhanced to £3,000 and known as the London ESF AGE. This uplift is only available in London as the enhancement has in part been funded by the Greater London Authority. It will only be available to employers with a London postcode who employ no more than 249 members of staff but all other AGE criteria remain the same.