News

Learners are turning down apprenticeships as families cannot afford to miss out on vital benefits payments.

An investigation by FE Week has found families lose child benefit and child tax credits, if a young dependent person takes up an apprenticeship, with the national apprentice minimum wage rate of £2.50 an hour.  Although the minimum wage, which is due to rise to £2.60 from October 1, is designed to offer a pay which is greater than money received in benefits, some families face being left more than £150 out of pocket.

This startling reality has proved a barrier for entry, forcing them to make the difficult decision to pull the plug on an apprenticeship - causing the young person to miss out on work experience - in favour of a college-based programme.

Patrick McLeod, head of business engagement at Filton College, said a learner turned their back on an apprenticeship, due to be paid £2.50-per-hour for working 30-hours-a-week, after it proved too costly for the family.  Mr McLeod said the mother was told she would lose her £60-per-week in child tax credits, child benefit of £20-per-week and £159-a-month in child support allowance. Taking into account the minimum wage whilst on an apprenticeship, that left her £179 out of pocket per month.

The National Apprenticeship Service (NAS) said employers often pay more than the minimum wage, but they are aware of benefit issues.A statement from NAS said: "(We have) been made aware that this is an issue for some apprentices and their families."Although the minimum wage for apprentices is £2.50 an hour, employers often pay more, and the average apprentice pay is £170 take home pay per week."

A spokesman for HM Revenue & Customs (HMRC) said child tax credit and child benefit cease when a young person takes on a waged apprenticeship.