Replies
No one has replied to this post.
Yes, you're right, a Levy payer with insufficient funds would have to make a contribution for a 16-21 year old.
Theoretically (although I'm not sure how many of these employers exist), a Levy payer with fewer than 50 staff could still have the SEM flag which I *think* would stop it but if you've got a pay bill of £3 million and less than 50 staff you can probably afford a few quid...
As Steve says, you're right, they have to pay even for 16-21 year olds.
I don't think the small employer indicator now does anything though. The co-investment waiver just applies to non-levy, regardless of staff numbers. As said, a levy payer with fewer than 50 employees is rare anyway.
It's not fair, as it isn't even just levy payers, it's levy account holders, which is a subtle but important difference. If an employer was once a levy payer, but hasn't been for the last few years, they are still treated like a levy payer (and would have to pay co-investment for 16-21 year olds). They can apply to go back to a non-levy account, but it involves completely closing their existing DAS account, and opening a new one. I don't know what that does to existing apprentices, we've never had an employer do it. It's going to be worse when the employer contribution rises to 25%. An employer whose PAYE is now below £3 million but they still have a levy account, will have to pay £3k for a £12k apprenticeship, whilst an employer with the same current PAYE who has a non-levy account, pays nothing (assuming 16-24 years). Worth us providers being aware so we can advise employers in that situation, but I can't find any guidance on it.
Becky O'Brien
Co-investment for levy with insufficient funds for 16-21s
Created
I feel this may be a basic question, but it's something I've ever had to think about before.
Am I right that the exemption for co-investment for 16-21's only applies to non-levy employers, and that levy payers who have insufficient funds DO have to pay co-investment for the relevant amount no matter the age of the apprentice?
Looking at the funding rules:
Para 182 mentions the need for both non-levy and levy with insufficient funds to pay co-investment.
182. Employers who do not pay the apprenticeship levy, and levy paying employers with insufficient funds, must co-invest...
Para 183 mentions that the exemptions in the following clauses apply to para 182.
The exemptions below apply to paragraph 182. In the circumstances below...
Para 183.1 gives the 16-21 exemption, but ONLY mentions non-levy employers, not levy with insufficient funds, so it surely doesn't apply to levy-payers with insufficient funds?
183.1. Employers who do not pay the levy, if at the start of their apprenticeship training the apprentice is aged between 16 and 21 years old
Also we have 16-21s with levy payers with insufficient funds in our co-investment report, so I tend to think they have to pay, unless there's something very wrong with the report.