Traineeships are to be exempted from a benefits rule that was “compromising” the programme.
The Department for Work and Pensions’ (DWP) 16-hour rule, which limits the amount of time Job Seeker’s Allowance (JSA) claimants can train every week, will no longer apply to traineeships — the government’s flagship youth unemployment policy.
The move came as part of the Autumn Statement, which read: “The government will ensure that the benefit rules do not impede the take-up and effectiveness of traineeships by exempting those undertaking a traineeship from the rule which prevents JSA claimants from doing more than 16 hours of study per week.”
However, it remained unclear when the exemption would come into force with, FE Week understands, the DWP and the Department for Business, Innovation and Skills (BIS) still locked in talks about the move.
It follows concerns (as reported in the last edition of FE Week) from Skills Funding Agency boss Keith Smith and Ofsted FE and skills director Matthew Coffey about the popularity of traineeships.
It also follows criticism in August from the Association of Employment and Learning Providers (AELP) that the 16-hour rule could adversely affect traineeships.
An AELP spokesperson said: “Now the announcement has been made, we would expect to see early implementation and will be urging that to happen.
“We will want to explore with the government whether the rule changes affect work experience as well, but there is no doubt this announcement is a major step forward.”
Association of Colleges chief executive Martin Doel said: “This change will enable colleges to more effectively meet the needs of young people at a time of stubbornly high youth unemployment.”
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Editorial – A step in the right direction
Traineeships are part of the ‘apprenticeship family’, overseen by the National Apprenticeship Service, and considered by many to be a pre-apprenticeship programme in all but name.
Their exemption from the DWP’s 16-hour rule will come as a welcome surprise. Albeit a long overdue one.
However, it is worth noting that questions remain about when it will actually come into effect and whether other types of work experience programs will also be exempt.
Once in place, it should make the scheme significantly more attractive and affordable to many young people, so hopefully more will benefit.
This will increase participation, but is that enough for traineeships to be successful?
Without successful progression into meaningful paid employment we will have failed, like many of the youth employment programmes long since consigned to the history books.
So, as I’ve highlighted in this column before, the next logical step should be a financial incentive for a positive outcome.
If providers continue to be simply paid based on the duration of the traineeship then won’t some keep them out of paid work and on JSA for as long as possible?
With youth unemployment so high, now is not the time to be introducing perverse incentives.
Nick Linford, editor
Would love to see a system where a trainee who gained employment, triggered 1. A job outcome payment to provider and 2. A first year tax an ni break for trainee and company as an incentive to hire. This would be cost neutral for government due to benefit savings.
This would encourage providers to place trainees (even if like work programme they get paid after 26weeks) and also encourage employers to provide work experience. It would also incentivise the trainee, as they would benefit from no tax or NI In their first year, especially beneficial for low income work.
Question: do we know when this is going to get implemented? Or where I can find any official notices relating to it?
Many thanks
This is from an internal DWP briefing:
Benefit considerations whilst on traineeships
36. Existing benefit rules apply.
37. A Traineeship is likely to total approximately 30 hours a week comprising:
• Employability training and English and maths where appropriate (likely to be 16 hours or less per week); and
• Work experience placement for up to 30 hours per week for a maximum of 8 consecutive weeks(for JSA claimants- this can be extended to 12 weeks, if an Apprenticeship opportunity becomes available).
Training Allowance
38. In most cases, Traineeships will have been designed so that the training element remains under 16 hours per week. Training Allowance will not be required.
39. Where the training element exceeds 16 hours per week for more than 2 weeks, existing Training Allowance arrangements apply.
40. Training Allowances should be paid out of existing Flexible Support Fund budgets at District Manager discretion. [note: usually declined]
So in reality, no real change –DBIS and DWP in parallel universes