The Apprenticeship Levy

A guide for care home managers

The apprenticeship levy can be complicated. But rest assured, we're here to clear things up for you.

Is this the key to upskilling your staff?

The Apprenticeship Levy is a payment made by larger employers towards funding apprenticeships in England. It was introduced in April 2017, and payments are made through the PAYE system.

Who does the apprenticeship levy apply to?

If your wage bill is higher than £3 million (and this includes all wages, bonuses, commissions, and pension contributions that are subject to Class 1 secondary NICs), you are obliged to pay the apprenticeship levy.

If your wage bill is less than £3 million, you won't pay the levy, but you can draw from it.

How much do companies pay into the Levy?

You will pay 0.5% of your annual wage bill, with wages based upon the earnings of employees who are subject to Class 1 National Insurance Contributions. You also get a £15,000 allowance - hence no payments are necessary if your wage bill is below £3 million.

Here is an example of how much a company will pay:

  • Wage bill = £5 million
  • Levy amount = 0.5% x £5 million = £25,000
  • £25,000 - £15,000 allowance = £10,000 Levy to pay

Any money that you have paid into the Apprenticeship Levy is held in a Digital Apprenticeship Service Account (DASA), which you can access to help pay for apprentice training.

So, how does the Apprenticeship Levy work?

You pay the required amount into the Apprenticeship Levy. The government will top up your Levy withdrawals by 10% every time you use the account to pay for training. So, for every £1,000 that is paid into your DASA you will receive £1,100 to spend on training. This money can only be used to pay for approved training and assessment, which must be provided by an approved training provider.

You could lose your Apprenticeship Levy

The Apprenticeship Levy was set up by the government to encourage companies to employ apprentices and train them. Not surprisingly, there is a stick that the government wields to urge you to do as it wants. That stick is in the form of a limit on the time for you to use your Apprenticeship Levy. If you haven't used these funds within 24 months after being paid into your account, you lose them.


Can you spend more on Apprenticeship training than is in your DASA?

Yes, of course you can! No one is going to stop you from investing in upskilling your apprentices. Before you go and spend that money though, the government may 'co-invest' with you. In this case, the government would provide funds as they would to care homes who don't pay into the Levy.

What if you don't pay into the Apprenticeship Levy - can you access funds for training?

Yes, and the co-investment by the government in this case is very valuable. You will need to contribute to the cost of training. The government pays the balance. The government's contribution is 90%. All the training needed by your apprentices could cost you just 10% of the cost of that training!

The Apprenticeship Levy - the key takeaways

  • Care homes companies with an annual wage bill above £3 million will contribute to the Apprenticeship Levy
  • Every pound paid in is worth £1.10 for training, thanks to the government's contribution
  • If you don't contribute or want to buy training worth more than your account balance, the government will co-invest in training
  • The government's co-investment is worth 90% of the cost of training
  • Training must be provided by an approved training company
  • If you haven't used your contribution within 24 months, you lose it

For more information about the Apprenticeship Levy, and how you can make sure you don't lose out on valuable government additional funding and co-investment, contact Strive Care today.

Be smart with your Apprenticeship Levy!

Many care homes are benefiting from the Apprenticeship Levy. It includes free money from the government. How often have you been able to use that expression for your business? "Free money from the government." It's got a great ring to it. The question is, how do you access this free money?

Have you been paying into the Apprenticeship Levy?

If you have been paying into the Apprenticeship Levy, time is running out to use your contributions. If you don't use them before their deadline, you will also lose the 10% contribution that the government will add to your Levy pot.

We're sure that you don't want to lose your contributions. That would be like pouring money down the drain, while simultaneously turning your nose up at free government money. Not a good business decision.

Perhaps just as bad, other smaller care homes who haven't contributed will be able to use the money you have deposited toward their training and apprenticeships. Effectively, you will be paying for your competitors to increase the quality of their staff by training them. That's not simply bad business, it's a terrible strategy.


Don't lose your Levy pot, invest it in your business

Instead of succumbing to those bad business mistakes, you should act now to make sure you get the full value from your Apprenticeship Levy pot. It can be used for a variety of training purposes, including:

  • Training existing employees
  • Training of leaders and managers
  • Helping employees to gain career enhancing qualifications

Other benefits of using your Levy pot

As if pouring money down the drain isn't enough incentive to ensure you are smart with your Levy pot, training employees provides a host of other benefits. For example:

  • Apprenticeships and training helps your business improve the quality of care provided
  • The CQC love care homes with qualified staff, and this should help boost your CQC rating
  • When you provide training to help employees become better at their job and improve their career chances, morale improves, engagement increases, and staff turnover falls

Access free money and benefit from approved training

Whatever the size of your care home or group, you won't want to miss out on the valuable government contributions available thorough the Apprenticeship Levy. It's like free money to access approved training and receive all the benefits this produces.

To find out more, and for help with ensuring that you access all the money for training available to care homes today, contact us today.

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