The Australian Government thinks that if you’re old enough to have a job then you’re old enough to manage a loan. To help young people on apprenticeships to government has introduced Trade Support Loans.
These loans are not intended to spent on any specific items – they can be spent by the individual’s discretion, providing flexibility. You also do not need to borrow the entire amount, only the amount that you require.
The loans are paid in instalments totalling up to $20,000 over the life of an Australian Apprenticeship:
Amount Up to $20,000
Payments Monthly in arrears, adding to:
Year 1 Up to $8,000
Year 2 Up to $6,000
Year 3 Up to $4,000
Year 4 Up to $2,000
The repayment of these loans works the same as the university HECS/HELP system. Once your income exceeds a certain threshold ($54,126 in 2016) you will be required to pay back a percentage of your loan through your tax return.
So if your income is below this amount you do not have to make a repayment for the year. There is no interest however the loan amount will increase with the consumer price index (CPI).
If you sign up for one of these loans make sure to tell your employer so that they withhold the extra tax required so that you don’t have a tax bill (covering the repayments) when you lodge.
As great incentive, you’ll get a 20 per cent discount on your loan when you successfully complete your apprenticeship.
Apprenticeship Network providers administer the Trade Support Loans. They determine eligibility for Trade Support Loans and assist recipients to make a claim for payments. Australian Apprentices can contact the Apprenticeship Network by calling 13 38 73.
It is a great idea for those people on lower apprenticeships incomes who need money to start out in the workplace to buy tools, a car, or to help meet the rent.
More information can be found at:
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