Karen Simmons

ASF 24/25 Earnings Threshold

Edited

Dear all,
Re the new £25,000 "earnings" threshold in the 2024/25 Adult Skills Fund guidance released early this week.
I logged a call with the ESFA helpdesk regarding a number of clarification questions and after a bit of back and forward they have confirmed the following:

Where they refer to gross annual wages they do mean income, and this includes from benefits. They will be updating the rules to make this clearer.

All income including benefits must be checked and evidence kept to inform the evidence pack.

So no more self-declarations for JSA, ESA, UC, we need to see evidence of learner income and record details of what has been seen.

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Ruth Canham-James

The requirement to see benefit evidence, including the amounts, to calculate income is going to be very challenging. They took that requirement out many years ago because it was creating pressure on the Job Centres to provide this evidence. With things being more digital these days, maybe it will be a bit easier.

I'm still waiting on an answer about what to do with people who are unemployed and not on benefits. Their personal income may be under £25k, but how do we evidence that? The two typical categories we have are young adults living with parents who are financially able to support them, and women whose husbands are are unemployed and on benefits, but she isn't separately claiming benefits (it can be a partly cultural thing).

I real hope they change the terminology as benefits are definitely not "salary" or "earnings", it should be "income".

Cecilia Esparza

So are we assuming that this type of full funding eligibility will also apply to learners unemployed and not in receipt of benefits? I can't find the definition of "unemployed" in the most recent 24/25 version of the funding rules. Should we assume it is applicable to all unemployed learners, regardless of benefits or availability to get back to work?

Ruth Canham-James

Cecilia Esparza I asked ESFA about this, and these were the questions and responses.

Question: The new Earnings threshold mentions "Unemployed", but then talks about SALARY below £25k. If a student is unemployed and on benefits, are they still fully fundable under local flexibilities? They don't receive any salary. The guidance is really unclear. It just goes on to mention that we should record a BSI where it applies, but not whether that impacts on funding.

Answer: Earnings Threshold would include anyone who has less than an income of £25k this would include those who are receiving benefits, unemployed and economically inactive. We have referred this policy back to DfE and will make sure this section is made clearer for Version 2.

Question: Similarly, are those students who might be unemployed but NOT claiming benefits, fully fundable? In 23/24 they weren't, but the new rules suggests that ANYONE unemployed is fully fundable under local flexibility, benefits or not. Asylum Seekers for example, might be unemployed, but not on benefits, can they be fully funded now under local flexibilities if they just declare they are unemployed?

Answer: As per above we have referred this policy section back to DfE, the intention of the Earnings Threshold is to include all those individuals who receive an income less than £25,000 and this includes those individuals who are unemployed and economically inactive. Asylum Seekers has been referred back to the DfE as this policy has not changed but confirmation will be sent out shortly in ESFA Update and V2 of the funding rules.

"Economically inactive". That'll included retired people if their total pension is below £25k. Also, why would Asylum Seekers be a special category if all economically inactive people with an income of less than £25k are fundable? They're no different from those unemployed and not on benefits. I'm not sure what they mean about the policy not having changed. Part of AEB fundability is currently attached to "wants to be employed, or progress into more sustainable employment", but that's been removed for 24/25. Since Asylum Seekers often can't work, we were unable to fully fund as "unemployed" this year, but the 24/25 rules suggest we will now be able to fund them.

(Edited)

Cecilia Esparza

Thanks Ruth. We have all those doubts too. Looking forward to an update.

Karen Simmons

Just attended another one of the AEB/ASF 24/25 webinars - they have totally confused everyone re the "Earnings" Threshold change and the removal of the Unemployed section.  I've been told by the Customer Helpdesk in writing that benefit and pensions income is included under "earnings", on the webinar they said it wasn't and its wages.  Majority of questions raised related to this area so by the end of the webinar I think they realised that they are not being clear and need to issue something to clarify what they mean earlier than version 2 in June.

Steve Hewitt

Good thing no one's trying to write a Fees Policy for next year or anything, isn't it?