Madison Bush
Published / 2 min read
On May 12th, changes to the Australian Apprenticeships Incentive System were announced as part of the 2026鈥�27 Federal Budget.
From听 January 1st 2027, support will focus more heavily on apprentices and small to medium employers, helping direct funding toward areas of greatest workforce need. The changes also aim to improve the way priority occupations are identified, ensuring incentive funding remains aligned with skills shortages and industry demand.
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These changes include adjustments to:
The Key Apprenticeship Program (KAP) Employer Incentive
Eligibility requirements for businesses receiving incentives
The methodology used for the Australian Apprenticeships Priority List
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What is changing?
Key Apprenticeship Program (KAP) Employer Incentive
The Federal Government has announced that the KAP Employer Incentive will continue until 30 June 2029.
Incentive payments will change to a maximum of $4,000, reduced from the current maximum of $5,000 in 2026.
Payments will continue to be made in two instalments during the first year of the apprenticeship.
Employers with 200 or more employees will no longer be eligible for the incentive. This does not apply to Group Training Organisations (GTOs).
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Priority Hiring Incentive
Employers with 200 or more employees will no longer be eligible. This does not apply to Group Training Organisations (GTOs).
There is no change to the current incentive amount. Payments will remain at up to $2,500, paid in two instalments during the first year of the apprenticeship.
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Australian Apprenticeships Priority List
Based on stakeholder feedback, the methodology used to update the Priority List is changing to better consider:
National and regional skills shortages
workforce demand and government priorities
greater stability to support long-term business planning
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What does this mean for employers?
While the changes do not commence until 1 January 2027, employers considering taking on an apprentice or trainee should familiarise themselves with the new eligibility requirements, particularly if they operate a larger workforce.
Small and medium-sized businesses will continue to be the primary focus of government incentive funding, reinforcing the important role they play in developing Australia's future workforce.
Employers are encouraged to stay informed as further implementation information becomes available ahead of the 2027 commencement date.
For further information, visit the Australian Government Budget website: www.budget.gov.au
