Understanding employer additional payments when impacted by provider termination

Overview - Additional payments for hiring a young apprentice

This article offers information for employers to help them understand employer additional payments when they have been impacted by a training provider termination.

Employers and providers can receive £1,000 each for taking on an apprentice who is either:

• aged 16 to 18 years old, or
• aged 19 to 25 years old and has an education, health and care (EHC) plan or has been in the care of their local authority

The provider claims the payments from ESFA on behalf of eligible employers.

ESFA then transfers the employer additional payment to the provider.

The provider is required to pass the payment on, in full, to the employer within 30 working days of receiving the funding from ESFA.

The payments are made to providers as follows:

• 90 days after the apprentice starts, 50% (£500) will be paid if the apprentice is still undertaking their apprenticeship; and
• 365 days after the apprentice starts, the remaining 50% (£500) will be paid if the apprentice is still undertaking their apprenticeship.

Additional payments in the context of provider termination

Your eligibility for additional payments remains unchanged even if your current provider's funding agreements are terminated and you move your apprentice to a new provider.

If any additional payments were not earned by your previous provider, the new provider can claim and earn the payments once your apprentice has transferred.

Recovering an additional payment you believe is owed to you

The following guidance applies if your previous provider is still trading:

• If you think you should have received an additional payment from your previous provider, and the payment was earned and paid to your previous provider before their funding agreements were terminated, then they are responsible for passing that payment onto you. You should contact your previous provider.

The following guidance applies if your previous provider is no longer trading:

• If additional payments were earned and paid to your previous provider before their funding agreements ended, and now they have ceased trading or entered insolvency then you should contact the providers legally appointed representative (insolvency practitioner) to request the payment.

You can look up the company name of your previous provider on the Gazette (Official Public Record) website. You can then review the record to find the contact information for their legally appointed representative.

• If an additional payment was earned but was not paid to your previous provider before they ceased trading or entered insolvency ESFA will not pay your additional payment to your previous provider.

Instead, if you transfer your apprentice to a new provider, they can claim the additional payment on your behalf. Your new provider needs to contact the ESFA for permission to do this.

If you don't transfer your apprentices, the ESFA can arrange to pay the additional payment directly to you, as long as it was generated and earned by your previous provider.