Guidance on expenses and benefits for apprenticeship bursaries for care leavers
15 September 2020
HMRC has published guidance on the exemption of Income Tax and National Insurance (NI) contributions that can be applied to the apprenticeship bursary payment provided to care leavers and those in local authority care.
Organisations do not need to pay any tax or NI contributions on the bursary payment to apprentices who are care leavers, or those who are in the care of a local authority. There will also be no reporting requirements for businesses in relation to this payment. The exemption is applicable to apprenticeships that began on, or after, 1 August 2018.
The Education and Skills Funding Agency (ESFA) can make the £1,000 bursary payment to be given to apprentices who are aged between 16 and 24, and who are starting an English apprenticeship. The bursary is paid to apprenticeship training providers in scenarios where an apprentice remains on an apprenticeship for a minimum of 60 days. The provider then transfers this to the apprentice in one single payment within 30 days of receiving it. This is the case unless the EFSA confirms in writing that a longer period is allowable.
There are certain eligibility conditions for the care leavers’ bursary for apprentices, and it is intended that the payment will help to remove barriers to accessing the apprenticeship. For an apprentice to be eligible, they must be either:
- They must be an eligible child, meaning a young person who is 16 or 17, who has been looked after by a UK local authority or health and social care trust for a minimum of 13 weeks since the age of 14, and who is still looked after
- They must be a relevant child. This is a young person who is 16 or 17 and has left care within the UK after their 16th birthday, and prior to leaving care, was classed as an eligible child
- They must be a former relevant child. This is a young person aged between 18 and 21, who, before turning 18, was either an eligible or relevant child. This can be up to their 25th birthday if they are in education or training
And:
- They must have commenced their apprenticeship on or after 1 August 2018, and not been in receipt of the care leavers’ bursary before
Further information is available in relation to the requirements for both employers and providers, and the evidence that they must collect and retain in the apprenticeship funding rules.
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