Trade Support Loan Program & Repayments
The TSL Program is intended to help encourage apprenticeships in targeted occupations, by providing apprentices with loan support during the period of their apprenticeship.
As loans, they are tax free, and must be repaid from after-tax earnings through the tax system. The repayment system is modelled closely on the existing HELP program for higher education.
Features of the TSL scheme
The loan scheme is available to Australian residents (citizen or PR, residing in Australia) with a tax file number, a bank account and meeting the occupational apprenticeship criteria.
Loans are targeted to priority occupations (National Skills Needs List) and qualifications (TSL Qualifications List). These lists are maintained by the Department of Industry and published online. See:
The scheme pays up to a maximum of $20,000 (lifetime limit) which will be indexed annually from 1 July 2017.
Payments of Trade Support Loans to apprentices under the programme are subject to the following annual ceilings (also indexed):
- First year – $8,000
- Second year – $6,000
- Third year – $4,000
- Fourth year – $2,000
- Up to $2,000 a year can be payable for fifth and later apprenticeship years (subject to the lifetime limit of $20,000 plus indexation increments).
Loan payments are sent by the government monthly in arrears, for 6 months at a time; with the apprentice required to confirm (“opt-in”) for loan payments to continue for each further 6 month period. Payment by EFT to a bank account in the apprentice’s name (or jointly owned) is the only payment method.
Repaying the loan
Loan debts are to be CPI-indexed annually and repayment thresholds (also indexed) will be the same as HECS/HELP income levels.
Repayments take the form of extra income tax which is payable once income goes over a threshold. “Income” for this purpose is “repayment income”, which is the total of:
- taxable income
- reportable fringe benefits
- total net investment loss (including net rental losses)
- reportable super contributions
- any exempt foreign employment income amounts.
There is a bonus 20% debt discount for apprentices completing their apprenticeship. The discount is subtracted from loan payments received.
Employment information for TSL loans
Because the repayment of a TSL debt is essentially by way of an income tax surcharge, it is important that employers (pay officers) are informed of the existence of a debt so that the correct amount of tax can be withheld from wages, to avoid an unanticipated shortfall at tax time.
Notification is achieved by the employee ticking the correct box on the employment TFN declaration form (Nat 3092). Should a variation to an already lodged declaration be required, the Withholding declaration (NAT 3093) is used.
For tax withholding rates, the correct tax withholding amount rate should be calculated which incorporates the HELP/TSL repayment amounts, based on income level. Links to the weekly, fortnightly and monthly loan component tax withholding schedules are here. These schedules are used to find the additional loan repayment amount to add to the usual tax withholding amount.
- Trade Support Loans
- Legislation & Guidelines
- Applications are administered via a national network of contracted Apprenticeship Network providers
This page was last modified 2018-04-23