Australia has entered 2026 with a refreshed set of apprenticeship incentives designed to strengthen the workforce, support priority industries, and help employers bring new talent into their businesses. Whether youāre in construction, trades, manufacturing, energy, or any sector facing skills shortages, these changes could directly impact your hiring and training plans for the year ahead.
Hereās a clear breakdown of whatās new, whatās changed, and what support remains available for employers and apprentices.
ā 1. New Key Apprenticeship Program (KAP) Employer Incentive
From 1 January 2026, employers hiring apprentices in Key Apprenticeship Program (KAP) occupations can now access a new employer incentive of up to $5,000, paid in two instalments during the apprenticeās first year.
Why this matters
KAP occupations are tied to national priorities such as:
- Clean energy and renewables
- Housing and construction
- Infrastructure and advanced manufacturing
If your business operates in these areas, this new incentive can significantly reduce the cost of onboarding and training new apprentices.
š 2. Changes to Existing Incentives
Several existing payments have been adjusted to redirect more funding toward priority and futureāfocused industries.
Australian Apprentice Training Support Payment (AATSP)
- Maximum payment reduced from $5,000 to $2,500
- Paid over the first two years
- Applies to apprentices in occupations on the Australian Apprenticeship Priority List
Priority Hiring Incentive
- Employer payment reduced from $5,000 to $2,500
- Paid in two instalments during the first year
- Applies to employers hiring apprentices in Priority List occupations at Certificate III level or above
These changes donāt remove support ā they simply rebalance it toward the new KAP structure.
š§ 3. Grandfathering Arrangements for Existing Apprentices
If an apprentice started before 1 January 2026, both the apprentice and employer will continue to receive the previous, higher incentive amounts, including:
- $5,000 AATSP
- $5,000 Priority Hiring Incentive
This ensures no one is disadvantaged midātraining and payroll planning remains stable for existing staff.
š° 4. Incentives That Continue Unchanged in 2026
Some supports remain exactly as they were in 2025:
Living Away From Home Allowance (LAFHA)
- Year 1: $120/week
- Year 2: $90/week
- Year 3: $45/week
Australian Apprenticeship Support Loans (AASL)
- Interestāfree loan up to $25,983 (2025ā26)
- 20% discount applied on completion
Disability Australian Apprentice Wage Support (DAAWS)
- $216.07/week for employers of apprentices with disability
These programs continue to help apprentices manage living costs and support employers who take on apprentices with additional needs.
š§ 5. What This Means for Small Business Owners
Opportunities
- Reduced upfront hiring costs in priority industries
- Access to a broader talent pool
- Support for longāterm workforce planning
Considerations
- Ensure the apprenticeās occupation is correctly matched to the Priority List or KAP occupation
- Update payroll and HR systems to reflect new payment schedules
- Review eligibility early to avoid missing out on incentives
For many small businesses, apprenticeships remain one of the most costāeffective ways to build a skilled, loyal workforce ā and these updated incentives make 2026 a strong year to consider hiring.
āØ Final Thoughts
The 2026 changes to apprenticeship incentives reflect Australiaās focus on building a futureāready workforce. For small business owners, this is an opportunity to bring in new talent with meaningful financial support behind you. If youāre planning to grow your team this year, now is the perfect time to review your eligibility and consider whether an apprentice could be the right fit.
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