And just like that, the federal government quietly pulled the fast one, slashing the incentives for apprentices and their employers across hundreds of traditional trades.
We are at a critical juncture. The Australian government’s decision to halve the Australian Apprentice Training Support Payment (AATSP) for apprentices in most priority occupations from January 1, 2026, is deeply concerning, especially for sectors like automotive, hospitality, and retail. While incentives in housing construction and clean energy will continue, from January 2026, for those in our vital industries, the incentive will be cut in half from $5,000 to $2,500 for both employers and apprentices.
This reduction comes at a time when we desperately need more skilled workers to fuel the future of mobility, particularly as Australia accelerates its shift toward electric vehicles (EVs). By 2030, we must train over 21,000 EV specialists to meet the demands of electrification and ensure our automotive industry remains competitive and innovative.
Apprenticeship programs are the backbone of developing skilled technicians essential to this transition. Cutting back support threatens to undermine our capacity to attract young talent, train the next generation of technicians, and ultimately, drive Australia’s automotive future forward.
From 1 January 2026 to 31 December 2026, the incentives available to eligible Australian Apprentices and their employers will change.
The Australian Government will continue to support apprenticeships as part of its broader plan to deliver a Future Made in Australia, meet net zero targets, and build 1.2 million homes by 2029. These initiatives aim to create jobs and support the skills needed for Australia’s future workforce.
Below is an overview of the incentives that will apply from January 1 2026:
New Incentives for 2026
Key Apprenticeship Program Employer Incentive
A new payment will be introduced for employers of apprentices training in Key Apprenticeship Program occupations. This payment recognises the role employers play in developing the skilled workforce needed to meet clean energy and housing targets.
Eligibility
Employers of apprentices working in KAP occupations will receive up to $5,000, paid in two instalments during the first year of the apprenticeship.
Changes to existing payments
Australian Apprentice Training Support Payment (AATSP)
Maximum full-time payment reduced from $5,000 to $2,500, paid over the first two years of an apprenticeship.*
For apprentices in an occupation and linked qualification on the Priority List.
Priority Hiring Incentive
Reduced full-time payment from $5,000 to $2,500, paid over the first two years of an apprenticeship. *
For employers of apprentices training toward an occupation and linked qualification on the Priority List
*Part-time will receive 50% of the full-time rate
Key Apprenticeship Program
Full-time apprentice: $10,000*
Full-time employer: $5,000*
*Part-time will receive 50% off the full-time rate
No changes for apprentices who commence before 2026
Eligible Australian Apprentices and employers who commence an apprenticeship before 1 January 2026 will continue to receive the current rates of $5,000 for the Australian Apprentice Training Support Payment (AATSP) and $5,000 for the Priority Hiring Incentive.
Incentives continuing in 2026
Key Apprenticeship Program Apprentice Incentive
Payments at 6, 12, 24, 36 months and on completion
Full-time - $2,000, Part-time - $1,000
Living Away From Home Allowance (LAFHA)
1st Year: $120.00 per week, 2nd Year: $90.00 per week, 3rd Year: $45.00 per week
Australian Apprenticeship Support Loans (AASL)
Interest-free loan up to $25,983 (2025–26), paid monthly.
Repayments start when income exceeds $67,000. Indexation capped at the lower of WPI or CPI.
A 20 percent discount applies on completion.
Disability Australian Apprentice Wage Support (DAAWS)
Weekly support payments of $216.07 for employers of Australian Apprentices with a disability.