Based on the requirements set out in the Trade Support Loans Act 2014, this report provides a summary of the administrative operation of the Trade Support Loans (TSL) program from 1 July 2018 to 30 June 2019.

Overview

The Australian Government’s TSL program provides Australian apprentices with access to an income-contingent loan over the course of their apprenticeship. At the time the TSL program was introduced, Australian apprentices were able to access up to $20,000 over the course of their apprenticeship.¹

The TSL program meets the Government’s commitment to deliver improved productivity and competitiveness to the Australian economy by ensuring there are highly skilled individuals in priority trades where there are growing skills shortages.

The program provides financial support to eligible Australian apprentices to assist them with expenses associated with living, learning and completing an apprenticeship, and helps them focus on completing their trade qualification. To be eligible for TSL payments, Australian apprentices must:

• reside in Australia and be an Australian citizen, or the holder of a permanent visa
• be undertaking one or more of the following:
  • Certificate III or IV qualification that leads to an occupation on the TSL Priority List
  • Certificate II, III or IV agricultural qualification specified on the TSL Priority List
  • Certificate II, III or IV horticulture qualification specified on the TSL Priority List, while working in rural or regional Australia
• meet the eligibility criteria outlined in the TSL program guidelines.

Governance

The program is governed by the Trade Support Loans Act 2014. Two legislative instruments are in place to administer the program:

• The Trade Support Loan Rules 2014 provide for matters relating to qualification for trade support loans, granting loans, application forms and other matters.
• The Trade Support Loans Priority List 2014 is established and maintained by the Minister to determine occupations or qualifications leading to occupations that the Minister considers a high priority.

Following the Administrative Arrangements Order on 29 May 2019, skills and training functions were transferred to the Department of Employment, Skills, Small and Family Business. The Australian Apprenticeship Support Network (AASN), the Department of Employment, Skills, Small and Family Business, and the Australian Taxation Office jointly deliver the TSL program.

Operation of the program

Under the TSL program, apprentices apply for a loan through their local AASN provider. Apprentices can apply for a maximum amount that depends on which year of their apprenticeship they are in.

The loans are flexible, meeting the needs of individual apprentices. The loan amounts are highest in the early years of training to support apprentices while their wages are lower. Apprentices who successfully complete their apprenticeship will have the amount of their loan reduced by 20 per cent.

Trade support loan payment rates

The trade support loan lifetime limit is set at $20,808 for 2018–19. The yearly and monthly instalment rates for Australian apprentices for 2018–19 are shown in Table B.1.

Apprentices repay trade support loans through the taxation system when their income reaches the minimum income threshold. In 2018–19, the minimum income threshold was $51,957. Apprentices may also choose to make voluntary payments on the loan before they reach the repayment threshold. Trade support loan debts are indexed annually according to the Consumer Price Index.

Performance information

In its fifth year of operation, the TSL program continues to provide eligible apprentices with substantial support, helping them with the costs of living and learning while undertaking an apprenticeship.

From program commencement to 30 June 2019, the department:

• received and processed 108,371 successful TSL applications
• made $814,576,515 in payments to eligible apprentices.

In 2018–19, the department:

• received and processed 20,309 TSL applications
• applied a completion discount to 11,050 apprentices who successfully completed their apprenticeship.

Nearly 56,000 Australian apprentices received a trade support loan payment during 2018–19.

Figures B.1 to B.6 provide details on the number of successful trade support loan applications received by quarter, calendar month, apprenticeship stage, state/territory and age, as well as the number of trade support loan payments made by quarter.

Figure B.1: Number of successful trade support loan applications received, by quarter, 2018–19

Figure B.2: Number of successful trade support loan applications received, by calendar month, 2018–19

Figure B.3: Number of trade support loan payments made, by quarter, 2018–19

Figure B.4: Number of successful trade support loan applications received, by apprenticeship stage, 2018–19

Figure B.5: Number of successful trade support loan applications received, by state/territory, 2018–19

Figure B.6: Number of successful trade support loan applications received, by age category, 2018–19