Apprenticeship incentive changes 2026
What the 2026 incentive changes mean for Australian apprentices.
From 1 January 2026, the support payments for apprentices and employers across many trades and occupations will be adjusted under the revised Key Apprenticeship Program (KAP) and related incentive schemes. (Apprenticeship Support)
What stays, what improves
- For apprentices starting in clean-energy or housing construction trades under KAP, incentive payments remain generous: full-time apprentices will be eligible for up to $10,000, and employers can receive $5,000. (Apprenticeships Australia)
- These payments continue to support the Government’s commitment to meet net-zero targets and deliver 1.2 million homes by 2029. (Ministers’ Media Centre)
- Other support measures remain unaffected, including the Australian Apprenticeship Support Loans (AASL), the Living Away From Home Allowance (LAFHA), and the Disability Australian Apprentice Wage Support (DAAWS). (Apprenticeship Support)
What’s changing from 2026
- For apprentices in priority-list occupations outside the KAP (i.e. those not in housing or clean-energy trades), the former Australian Apprentice Training Support Payment (AATSP) will be cut from $5,000 to $2,500 (full-time), paid over the first two years.
- Likewise, the Priority Hiring Incentive for employers outside those core trades will drop from $5,000 to $2,500.
- These reductions reflect a major reprioritisation with funding now focused on trades the Government considers critical to housing and clean-energy goals.
Existing incentive continues
If an apprenticeship or traineeship began before 1 January 2026, the existing incentive rates ($5,000 for AATSP/ Priority Hiring) will continue, the changes only apply to new commencements from 2026 onwards.
What this means for apprentices and employers
If you’re entering a trade in housing construction or clean energy, 2026 remains a promising time the incentives remain strong, helping support both your apprenticeship journey and your employer’s investment.
Key baseline change in 2026
- Under KAP (housing construction or clean-energy trades), full-time apprentices receive up to $10,000 over the life of the apprenticeship. Employers get $5,000. (dewr.gov.au)
- For other “priority occupations” that are not KAP-eligible (or for areas outside the new energy / housing stream), the former support scheme — Australian Apprentice Training Support Payment (AATSP) for apprentices, and Priority Hiring Incentive for employers — are being reduced. From 1 Jan 2026: the maximum full-time payment drops from $5,000 to $2,500 (for both apprentice and employer). (australianindustrygroup.com.au)
Implications by trade type example
| Trade | Scenario | Apprentice incentive (full-time) | Employer incentive (full-time) |
|---|---|---|---|
| Carpentry | If classified under KAP (e.g. housing construction) | Up to $10,000 over the apprenticeship | $5,000 |
| Carpentry if not KAP-eligible (just Priority List) | From 2026 onward | Reduced to $2,500 total (over first 2 years) | Reduced to $2,500 (over first 2 years) |
| Automotive (vehicle mechanic apprenticeship) | Likely outside clean energy/housing streams (not KAP) | Apprentice: $2,500 | Employer: $2,500 mtaa.com.au+1 |
| Electrical trades | If working in clean-energy or housing related wiring/ construction & qualifies for KAP | Apprentice: $10,000 | Employer: $5,000 |
| Electrician if not KAP-eligible (typical general electrical not tied to housing/energy program) | Priority-list but not KAP | Apprentice: $2,500 | Employer: $2,500 |
What “KAP eligibility” means and why it matters
Whether a trade like carpentry or electrician qualifies for the higher KAP incentives depends on whether the apprenticeship is linked to a qualification on the official priority list and whether the employer can provide “meaningful exposure, experience and work” in the housing construction or clean-energy sectors.
That means:
- A carpenter working on general renovations might not qualify for KAP so they’d get the reduced $2,500 incentive.
- An electrician undertaking wiring for new housing developments, or for clean-energy installations, may claim to KAP.
What stays the same for apprentices who start before 1 January 2026
If an apprenticeship began before 1 January 2026, the “old” incentive rates remain in effect for the duration of that apprenticeship, i.e. $5,000 for AATSP / $5,000 for Priority Hiring, if applicable.
1300apprentice will guide you through every incentive change so you don’t have to navigate the new rules alone. Whether you’re an apprentice or an employer, we’ll make sure you receive the correct payments and entitlements under the 2026 system.
Contact us today to discuss your situation and let our team take the guesswork out of your apprenticeship journey.
