Guidance

Apprenticeship unit technical funding guide

Published 8 May 2026

Applies to England

Introduction and purpose of the document

1. This document sets out the policy for apprenticeship unit funding in England and details of the apprenticeship units funding system for new starts on or after 28 April 2026. It explains how we will calculate funding for organisations receiving funding from us. Employers may find this information useful to help understand how employer accounts on the apprenticeship service operate or how government and employer co-investment will operate.

2. To understand how apprenticeship units and their funding system works, you should read this document together with:

• Apprenticeship unit funding rules
• Individualised Learner Record (ILR) specification, validation rules and appendices
• ILR Reports guidance

3. We may make changes to these documents.

Understanding our terminology

4. We use the terms ‘we’, ‘our’ and ‘us’ to refer to the Department for Education or the Department for Work and Pensions as may be applicable.

5. We use the terms ‘you’ or ‘provider’ to refer to any organisation holding a funding agreement with us through which we directly route funds from an employer’s account or government-employer co-investment.

6. We use the term ‘employer account’ to refer to the on-line account where employers can manage their funding for apprenticeship units, in the apprenticeship service.

7. We use the term ‘levy payer’ or ‘levy-paying employer’ to refer to an employer who pays the Apprenticeship Levy.

8. We use the term ‘non-levy payer’ or ‘non-paying employer’ to refer to an employer who does not pay the Apprenticeship Levy.

9. We use the term ‘sending employer’ to refer to a levy-paying employer who transfers levy funds in their apprenticeship service account to another employer to support their delivery of an apprenticeship unit. A ‘receiving employer’ is any (levy-paying or non-levy paying) employer who receives a transfer of funds in this way from a sending employer.

Policy background and purpose of apprenticeship units

10. In June 2025, the government published the Industrial Strategy which set out the introduction of short courses in England, funded by the Growth and Skills Levy.

11. These short courses are being introduced to give businesses the flexibility to develop the skills they need. They address critical skills gaps in the economy to enable quicker, targeted upskilling, helping employers to build a more agile and productive workforce while supporting individuals to gain skills which have a long-lasting impact on their careers.

12. From April 2026, employers can access a new suite of short, flexible training courses called apprenticeship units. These have been built from employer-led occupational standards, ensuring high-quality, targeted training that meets real business needs. They give employers choice and the ability to respond to emerging skills gaps. Details of these apprenticeship units and the sectors they are in can be found on Skills England’s website.

13. Apprenticeship units range between 30 to 140 hours delivered across one to sixteen weeks, giving flexibility to best suit the needs of the employer and learner. They are designed to support growth and productivity within businesses, upskilling employees aged 19 and over where new skills are required or where their job is changing.

The date we use to calculate funding

14. You give us information about learners and their training using the Individualised Learner Record (ILR) and the Earnings Adjustment Statement (EAS). We use this information to work out the funding you have earned for delivering this learning.

15. We will use information maintained by employers and you on the apprenticeship service to calculate payments from that account, and if any co-investment is required from the employer and/or the government.

Recording data on the ILR for apprenticeship units

16. Aims that are part of the Growth and Skills Short Course Offer - Apprenticeship Units in the ILR that start between 28 April and 31 July 2026 are to be recorded as follows:

• Non-funded (funding model 99)
• Learning aim that is not part of a programme (aim type 4)

17. Also record the following against each aim:

• LDM code 403 Apprenticeship Unit Identifier - to be used to identify the aim is part of an apprenticeship unit

• LDM code 404 Apprenticeship unit 30% and onboarding milestone - to be used when a training provider has completed all the learner’s onboarding and delivered 30% of the planned delivery hours of their apprenticeship unit

18. The aims that are eligible for funding from 28 April to 31 July 2026 are marked in the Find a Learning Aim service with:

• category code 91:  Growth and Skills Levy Short Courses - Apprenticeship Units

Funding rates

19. Every apprenticeship unit is assigned to a funding rate. This is the maximum amount that the Government will contribute towards an apprenticeship unit.

20. We allocate apprenticeship units a funding rate based on recommendations from Skills England. New apprenticeship units are allocated a funding rate once Skills England has approved them for delivery. Skills England will review apprenticeship units’ funding rates on a regular basis.

21. When an employer identifies the apprenticeship unit they need, they will enter into a contract with you for training.

22. For the purposes of calculating earnings, we use the funding rate assigned to the apprenticeship unit. This is the total cost of training and assessment, and we do not calculate earnings separately for training.

23. The total price does not include:

• Value Added Tax (VAT)
• the costs of learning support

24. The funding rate is the amount that levy-paying employers can use towards an individual apprenticeship unit from their employer account. The funding rate is the price that government will ‘co-invest’ towards, where an employer has insufficient funds in their employer account (including those funded through transfers where the sending employer’s account subsequently has insufficient funds) and is eligible for extra government support. Annex 1 shows an example of this.

25. The funding rate, which applies at the start of the programme, will continue to apply for the duration of the programme regardless of any change to the provider or employer.

26. Additional payments for learning support funding are not part of the funding rate and are paid separately.

27. You can find the list of apprenticeship units eligible for public funding in the Find a learning aim service. We update this regularly. More information about eligibility for public funding is in the apprenticeship unit funding rules.

Apprenticeship Unit Provider and Assessment Register

28. We will only make payments to a provider if they are on the main provider or the employer-provider route of the Apprenticeship Provider and Assessment Register (APAR) and has been verified by us as being able to deliver apprenticeship units in a specified standard route. Subcontracting of apprenticeship unit delivery is not permitted.

29. We are limiting initial delivery of apprenticeship units to existing APAR providers who deliver in the standards or sector subject areas (tier 2) in the areas from which the apprenticeship units are drawn.

30. Providers will need to be:

• already on the APAR and actively delivering apprenticeships
• not have any indicator rated as ‘at risk’ on the Apprenticeship Accountability Framework
• free from contractual funding restrictions

31. This approach will allow the department to monitor and refine delivery before introducing further apprenticeship units and considering opening entry to a wider group of providers later in 2026.

The earnings method

Indicative earnings

32. Indicative earnings are generated at 30% of the funding rate for each learner completing 30% duration (between the start date and planned end date). A further 70% of the funding rate is generated for each learner at the planned end date.

Payment milestones

33. We will base your earnings on learners reaching two milestones in their apprenticeship unit journey. For each learner on an apprenticeship unit:

a. milestone 1 will be a payment of 30% of the total cost of the apprenticeship unit funding rate. It is payable once the learner has been onboarded and undertaken 30% of the apprenticeship unit (once 30% of the planned delivery hours have been completed).

• milestone 1 is triggered using LDM code 404 for the learner

b. milestone 2 will be paid on completion and achievement. This will be a second (and final) payment of 70% of the total cost of the apprenticeship unit funding rate. It is payable once the learner has undertaken 100% of the apprenticeship unit (once 100% of the planned delivery hours have been completed). The learner must also have a successful outcome from the apprenticeship unit. This means that they must have passed the assessment, and the employer and learner have recorded on the training plan that it has been delivered satisfactorily.

• milestone 2 is triggered by confirmation (on the ILR) that:

  • training has been completed
  • a successful outcome has been achieved

34. See Annex 1 for an example showing how earnings are calculated and paid.

Recording late data in the ILR

35. If you discover that a milestone payment has been claimed in error and you cannot correct this in the current reporting period (e.g. because the R14 collection has passed for the year in which it was claimed) you may have earned funding that you need to pay back. In this case please refer to information on recording late data in the ILR in the ‘The impact of incomplete information’ section of the Provider Support Manual.

Co-investment

36. Where a levy paying employer has insufficient or no levy funds to cover apprenticeship and apprenticeship unit payment(s) (including those funded through transfers that subsequently have insufficient funds), the government will fund 95% of the milestone payment(s) due (less any available levy funds). The employer will be responsible for the remaining 5%. Providers will need to liaise directly with the employer regarding the payment of any outstanding balance.

37. In cases where a learner changes employer or provider, but continues on the same apprenticeship unit as before, we will use the date the learner originally started the apprenticeship unit to determine the level of government funding.  The rate we use depends on the start date.

38. In any month where an employer’s account has a positive balance, but the balance is less than the payment(s) due (for apprenticeships and apprenticeship units), we will use all of the available balance in the employer’s account and the remaining amount will be paid using contributions from the government and the employer, as described in  paragraph 36.

39. In any month where an employer’s account has a zero balance, the appropriate milestone(s) will be paid using contributions from the government and the employer, as described in in paragraph 36.

40. For employers who do not pay the apprenticeship levy, the government will fund all of the apprenticeship unit training and assessment costs, up to the funding rate (as stated on the apprenticeship unit).

41. We will provide you with monthly reports to show which learners we have fully funded from the employer’s account and which learners will need co‑investment. These reports will tell you how much you need to collect from each employer for co-investment and for which learners. We will provide information to employers through the apprenticeship service on how much they are due to pay each provider for co-investment where applicable.

42. See Annex 1 for an example showing how we pay for training and assessment through employer accounts or co-investment.

Payments on the apprenticeship service and employer accounts

Funds entering employer’s accounts

43. Once employers have declared the apprenticeship levy to HM Revenue and Customs (HMRC), their employer account will update after the 22nd day of every month.

44. HMRC will use data about the home address of employees to calculate how much each employer will have to spend through the English apprenticeship system. HMRC will use this data to work out what percentage of each employer’s pay bill they pay to employees living in England. We show the percentage for each PAYE scheme in the apprenticeship service.

45. HMRC calculate this percentage quarterly. Employers can update their employee’s address data on HMRC’s database by adding their home postcode to their real-time information tax return for three consecutive months.

46. We will assume that all employees are based in England when a PAYE scheme is created, until the next quarterly calculation date when we will re-calculate the percentage. This means that the percentage will default to 100% of funds if the calculation has not yet been run on a PAYE scheme.

47. We will apply a 10% top up to monthly funds entering an employer’s account. For example, if a levy payment of £1,000 was added to the employer’s account, we would top this up with £100.

48. The funding entering an employer’s account each month will be calculated as follows:

• monthly levy declared to HMRC
• multiplied by the proportion of the employer’s pay bill paid to their workforce living in England
• plus a 10% government top-up on this amount

49. Funds will enter the employer’s account shortly after the 22nd day of each month.

50. For employers that set up an account or add a new PAYE scheme to their existing account, if they have made valid levy declarations to HMRC then we will add the funds to their accounts immediately. We will base the funds that we add to employer’s accounts on their levy declarations to HMRC to date, limited to the most recent 24 months of levy declarations.

51. We will apply a negative adjustment to the funds in the employer’s account if the cumulative year to date amount of levy declared to HMRC decreases – this will include a negative 10% adjustment for the government top-up. We will also reflect end-of-year adjustments to the HMRC declaration in the employer’s account for the previous 24 months. We will apply these adjustments to the month that we receive the adjustment.

52. After 24 months, any unused funds will be removed from the employer’s account. This will also apply to any top-ups added to the employer’s account. For example, funds entering an employer’s account in September 2025 will become unavailable in September 2027 unless they are spent. Employers spend money from their account when it leaves the employer’s account as a payment to you.

53. The account will work on a first-in, first-out basis, through either payment or expiry. Whenever we take a payment from an employer’s account, we will automatically use the funds that entered the account first.

54. We will offset any negative adjustments against the most recent months’ unspent funds paid into the employer’s account, which will reduce the amount that is due to expire. Positive adjustments will expire in 24 months of being paid into an employer’s account if they are unused.

55. We may investigate the impact of large levy adjustments within an employer’s account, which may result in manual adjustments to the account if required.

Using employer accounts to pay for apprenticeship units

56. Apprenticeship unit learners can only be added by the provider in the apprenticeship service following a successful ILR submission to Submit Learner Data (SLD). Sufficient time should be allowed for the employer to approve new learning requests in the apprenticeship service before the learning start date.

57. Providers with permissions to add learners can reserve funds in the apprenticeship service and submit learners to employers for approval. Providers that do not have permissions to add learners, or where learning is to be funded using transfer of levy funds, the employer will need to submit a blank learning request, selecting the type of funding, for the provider to add learner details.

58. Changes to learner and training details in the apprenticeship service can only be made by the provider using the ILR. Employers will need to inform the provider for any changes required with the option to pause payments until details are updated and correct.

59. We automatically debit payments to the provider for apprenticeship unit training and assessment from employer accounts where the employer has authorised us to do so.

60. The employer will be able to pause or permanently stop payments for a learner using the apprenticeship service. This will apply to all future payments from the date at which the apprenticeship unit is paused or stopped. We calculate payments to providers after the ILR collection closes each month. This applies to all payments from co-investment and from employer’s accounts.

61. See Annex 1 for an example showing how we pay for training and assessment through employer accounts or co-investment.

62. In our funding reports, we use a system of “funding line types” to categorise funding. For apprenticeship units, the funding line types are determined at the point when the apprenticeship unit starts with the employer. We use the “non-levy” funding line types where the employer has not previously paid the levy at that point. However, in some cases the employer may start to pay the levy at a later date during that apprenticeship unit. This means you may see levy transactions against “non-levy” funding line types. For more information on funding line types see the ILR Funding Reports guidance.

63. When an employer  approves each apprenticeship unit  in the employer’s account, we will automatically allocate it a priority order; this includes those funded through a transfer. We will use this priority order to identify which apprenticeship units we fund first from funds in an employer’s account.

64. Payments for apprenticeships will be prioritised ahead of payments for apprenticeship units. This priority order will be applied when determining which payments are processed from an employer’s account.

65. Employers can control the priority in which payments are processed. This allows employers to choose the priority order in which providers’ payments are processed and paid from their account.

66. We will prioritise any apprenticeship units funded through a transfer on the apprenticeship service before any non-transfers. If an employer has agreed to fund apprenticeship units through a transfer, we will prioritise those individuals above their own learners that they are funding using their levy.

67. If an employer has agreed to fund multiple apprenticeship units using a levy transfer, the default priority order will be:

• the earliest date that the transfer of funds was approved (by the learner’s employer, the training provider and then the sending employer)

• the Unique Learner Number (ULN) in ascending order where apprentices share the date that they were approved

68. If the sending employer (the employer who transferred the levy to another employer) either has insufficient levy funds in their account or has exceeded their transfer allowance for that financial year, the learner’s employer (the receiving employer) will fund the training if they have their own levy balance available or through co-investment. Apprenticeship unit learners for non-levy paying employers will be fully funded. Where this occurs, we will use the levy funds of the learner’s employer according to the priority ordering detailed in the next paragraph. We will pay for these learners in priority order alongside any other learners funded through that account.

69. For non-transfers, the primary ordering is by provider, so we prioritise all apprenticeship units with one provider over all other learners with a different provider. If the employer does not change the provider order, learners will be automatically prioritised by:

• provider, based on the first time an apprenticeship unit was approved (by both the employer and provider) for that provider, then
• the date that the apprenticeship unit has been approved (by both the employer and provider), where there are multiple learners for the same provider, then
• ULN in ascending order where learners share the date they were approved in the employer’s account

70. Employer users with appropriate permissions within the apprenticeship service can define the provider priority. This feature becomes active when employers add more than one provider to their account. If the employer changes the provider priority, this change will override the default provider priority.

71. If the employer does not change the priority of the provider, then the default priority order remains (see paragraph 69).

72. All approved learners with a provider of a higher priority will have their funding payments processed before any approved learners with providers of a lower priority.

Prioritisation example

73. We give the following example of the default prioritisation using three different providers: A, B and C, and a mixture of apprenticeships and apprenticeship units approved in May and September (we have used ULNs in the example for illustrative purposes and any correlation with a valid apprentice’s ULN is unintended).

74. The employer approves an apprenticeship (ULN 99999999999) with Provider A on 1 May and this apprenticeship is given number 1 priority for payment in June.

75. The employer approves an apprenticeship unit (ULN 22222222222) with Provider B on 1 May and the apprenticeship unit is given number 2 priority for payment in June, as apprenticeships are prioritised ahead of apprenticeship units.

76. The employer approves another apprenticeship (ULN 33333333333) with Provider A on 2 May and the apprenticeship is given number 2 priority for payment in June because Provider A has priority over Provider B and apprenticeships are prioritised ahead of apprenticeship units. The apprenticeship unit (ULN 22222222222) with Provider B is now updated to number 3 priority for payment in June.

77. The employer approves two apprenticeship units (ULNs 88888888888 and 55555555555) with Provider A on 10 September. Assuming Provider A remains the default number one priority, the apprenticeship units are given number 3 and 4 priorities for payment in October. The apprenticeship unit (ULN 55555555555) is given number 3 priority over the apprenticeship unit (ULN 88888888888) because of ascending numerical order of the ULNs. The apprenticeship unit (ULN 22222222222) with Provider B is now updated to number 5 priority for payment in October because Provider A has priority over Provider B. The apprenticeship (ULN 33333333333) with Provider A approved in May retains its existing priority The employer approves an apprenticeship with Provider C on 10 September and the apprenticeship (ULN 11111111111) is given number 6 priority for payment in October (assuming the default provider priority has not been changed) because Providers A and B have priority over Provider C.

Provider	Date apprenticeship approved	ULN	Provider priority	Apprentice priority for June payments	Apprentice priority for October payments
Provider A	01/05/2018	99999999999	1	1	1
Provider B	01/05/2018	22222222222	2	3	5
Provider A	02/05/2018	33333333333	1	2	2
Provider C	10/09/2018	11111111111	3	N/A	6
Provider A	10/09/2018	88888888888	1	N/A	4
Provider A	10/09/2018	55555555555	1	N/A	3

78. We will use the priority order at the time the ILR collection closes for payment processing.

79. The example below shows how we apply the priority order to calculate payments. An employer with an employer account balance of £800 has one apprenticeship and one apprenticeship unit that have each earned £500 this month (total = £1,000), and they are calculated in priority order:

	Employer account – Priority order	Employer account – Start balance	Employer account – Payment	Employer account – End balance	Co-investment – Outstanding earnings	Co-investment – Government contribution	Co-investment – Employer contribution
1 Apprenticeship	1	£800	£500	£300	£0	£0	£0
2 Apprenticeship unit	2	£300	£300	£0	£200	£180	£20

80. We will not take funding for learning support from an employer’s account.

Transfers allowance

81. We calculate an employer’s transfer allowance according to the levy declared in the previous tax year multiplied by the English percentage and the 10% automatic top-up from the Government. We will calculate this in April each year.

82. The transfer allowance is calculated, around the start of each tax year, and is based on the total amount of levy declared (to HMRC) during the previous tax year, with the English percentage applied, plus the 10% government top-up payment. The annual transfer allowance percentage is currently set at 50% (and is based on actual transfer payments taken within the financial year) – this allowance covers transfers for both apprenticeship units and the main apprenticeship programme.

83. We treat this as a cap for funds that employers can transfer in that tax year. Employers can only reach this cap if sufficient levy funds are available to make payments for training throughout the year.

84. We will not carry over any unspent allowance into the next tax year’s allowance.

85. We will take any payments calculated in May 2026 or later from the transfer allowance for the 2025 to 2026 tax year, if there is one. This includes cases where the delivery takes place in March 2026 or earlier, but where we have not calculated the payment until May 2026 or later.

86. If the transfer fails (meaning the sending employer does not have sufficient levy funds to cover the payment), then the level of government funding will be dependent on the start date, and levy status of the receiving employer.

Changes of circumstances and matching data between the ILR and apprenticeship service

87. We will use the apprentice data from your ILR submissions for the data held in the apprenticeship service.

88. Any changes to data in your ILR will be stored within the apprenticeship service and used to update the learner details in the provider and employer’s account.

89. If a change in circumstance occurs for a learner during their apprenticeship unit, the provider needs to ensure this is reflected in the ILR. We will store this information and update the apprenticeship service, which may require re-approval from an employer if specific details (course, provider, employer and ULN) are changed. If unapproved, we will not pay any further funding.

90. Following the close of the monthly ILR submission window, we will provide reports to employers and providers to identify apprentices who are unapproved. We will show this data to employers alongside the details of individual apprentices in their account, and to providers through further reports on Submit Learner Data.

91. Once a record has been paid funding, we will not recover that funding if the data subsequently changes and there is no additional approval. You will not earn any subsequent funding after the data change if there is no employer approval on the apprenticeship service.

92. We will recover funding if a learner is completely removed from an ILR within the same funding year (all funds paid year to date), if LDM 404 is removed (30% of funding) and if the completion status is removed (70% of funding).

93. If the learner changes provider after milestone 1 has been claimed, then the new provider will not be able to claim this payment (as milestone 1 can only be claimed once). In these circumstances you need to agree with the employer any additional cost and they will need pay this directly to the provider. This does not need to be recorded in the ILR or on the apprenticeship service.

94. If the learner changes employer, the provider will only be able to claim any milestone payments which have not already been claimed for the learner.

Other payments

Learning support funding

95. You can earn learning support at a fixed one-off payment of £150 by claiming this via the earnings adjustment statement (EAS). This can only be claimed once milestone 1 has been reached and reasonable adjustments have been provided to the learner and where evidence of costs can be provided. Find guidance on learning support .

96. Further guidance on the earnings adjustment statement (EAS) can be found on gov.uk. For learning support for apprenticeship units which start in the period from April to July 2026, the EAS will not have separate funding lines for apprenticeship units. Providers should record this learning support as if it is Excess Learning Support using the equivalent funding line for full apprenticeships. Note that for a small number of learners, if the apprenticeship unit started before 1 August 2026, but they become eligible for £150 learning support on or after 1 August 2026, you will need to use the same approach within the EAS for 2026 to 2027.

97. If the cost of providing reasonable adjustments to a learner is more than £150 then the provider must submit a claim to us at the beginning of the apprenticeship unit, or when it is identified that the learner requires support costing more than £150. The provider must complete and send the claim form to us so that we can authorise the request. Forms can be accessed: Apprenticeship units learning support costs - GOV.UK.

• providers will claim the first £150 of this cost through the EAS (as per paragraph 98) – you will not need our prior authorisation to claim this £150
• when claiming for the additional cost (above £150), you will need to submit your claim for the total amount. Should this be approved, we will deduct the initial £150 payment from the claim
  • For costs that relate to support staff, providers will need to submit an estimated cost claim. Upon approval, providers will then need to submit an actual cost claim once the learner has completed their apprenticeship unit (or at the point they leave the programme). Following final approval, payment will then be made at the next available pay run.
  • For costs that relate to materials (such as specialist equipment, etc), providers will need to submit an actual cost claim alongside a copy of the invoice (as evidence). Upon approval, payments will be made at the next available pay run.

For more information, please refer to the apprenticeship unit funding rules and our Support for apprentices with a learning difficulty or disability guidance on GOV.UK.

98. We fully fund these earnings and do not take them from the employer’s apprenticeship service account.

Funding reports

99. We will continue to provide funding reports to show you what funding we have calculated for you. These will range from headline funding reports to detailed reports at learner level; similar to the funding summary reports and detailed reports at learner level which we currently provide.

100. You will receive a set of reports when you submit your ILR data that will indicate how much you have and will earn. The report explaining how you will be paid those earnings; either through government co-investment, from an employer’s account, or a combination of the two, will not be available until after the ILR collection has closed for each month.

101. These reports will also show the amount of co-investment that you need to collect from each employer. For apprenticeship units, providers will need to liaise directly with the employer regarding the payment of any outstanding balance.

102. For more information on funding reports, please see the guidance on ILR funding reports

Processing and changes at the end of the funding year

103. This section describes what you and employers need to do by the end of the R14 ILR return date. It also describes how we manage changes and calculate payments when two ILR years are open at the same time.

Last date for changes

104. The last ILR collection for each funding year is currently ‘R14’. The date you must return each ILR collection to us is in the Data Collection Timetable in the ILR Specification. For example, for the 2025 to 2026 funding year, the R14 ILR return date is 22 October 2026.

105. You must record any changes that happen up to 31 July in the funding year in the ILR by the R14 return for that year.

106. For employers using the apprenticeship service, the same deadline applies to any changes that relate to information in ILR returns. Some examples include:

• if a learner started learning on 31 July or earlier, the information for that learner must be approved on the apprenticeship service by the R14 ILR return date in October, and that learner must be included in the R14 ILR return

• if an employer wishes to stop the funding for a learner, the ‘stop’ date in the apprenticeship service must be:

• in the current funding year (from 1 August to 31 July) or
• recorded in the apprenticeship service before the R14 ILR return date in October if it relates to the previous funding year
• any data matching issues between the ILR and the apprenticeship service relating to funding up to July must be resolved by the R14 ILR return date in October

Payment processing after the funding year end

107. There is an overlapping period when you return ILR information about two funding years to us; this is from 1 August to the return date of the final ‘R14’ ILR collection.

108. During this overlapping period, we will process extra payment transactions with employers’ accounts in the apprenticeship service, soon after the R13 and R14 ILR returns. R13 and R14 ILR returns cover the same time period as the R12 ILR return and are generally used to correct earlier data. If there are no corrections, there will be no new transactions.

109. For employers, this means two extra payment transaction dates in September and October, which will use the levy balance as at the R13 and R14 ILR return dates.

110. For providers, we will add payments from the R13 and R14 transactions to the payments from R02 and R03 ILR returns respectively, and paid at the same time as the R02 and R03 payments.

111. The ‘Short Course monthly payment report’ shows the payments made following each ILR return date. As there could be extra transactions in employers’ accounts following the R13 and R14 return dates, and extra co-investment generated, there are columns in this report showing R13 and R14 payments relating to earnings from August to July. Further information is in the guidance on ILR Funding Reports.

Annex 1 - An example of calculating earnings and generating payments

112. To demonstrate how earnings are calculated for apprenticeship units, we have used the following scenario:

• the employer engages a provider to deliver an apprenticeship unit with a price of £1,500 

• the learner was 20 at the start of the apprenticeship unit 

• the minimum number of delivery hours for compliance is 70 hours

• the apprenticeship unit is not eligible for any additional payments 

• if the employer does not pay the levy: the employer and / or provider have created a reservation for the apprenticeship unit

113. The provider adds an apprenticeship unit to their Individualised Learner Record (ILR) under the funding model 99.

114. The provider must add Learning Delivery Monitoring (LDM) code 403 to identify the record on funding model 99 is an apprenticeship unit. If LDM 403 is not added, then this data will not be passed to the apprenticeship service for approval or earnings to be generated.

115. Once the apprenticeship unit has been added, we will calculate the earnings based on the price of the apprenticeship unit (£1,500). The earnings will be split into two milestones: milestone one for 30% of the total price and milestone two for 70% of the total price.

116. The milestone one earning is generated for the return period where we estimate 30% of the duration will be completed. We estimate the 30% of duration based upon the start date and planned end date submitted by a provider on their ILR. In this scenario, the first earning will be £450.

117. The milestone two earning is generated for the planned end date and is the remaining 70% of the total price. In this scenario, the second earning will be £1,050.

118. These earnings will be available in the provider’s indicative earnings report on Submit Learner Data (SLD).

119. The apprenticeship service will consume the data submitted in the provider’s ILR and the provider will then be able to push the apprenticeship unit to the relevant employer for approval.

120. We only release payments if the employer has approved the apprenticeship.

121. When the provider has delivered 30% of the delivery hours, 21 hours in this scenario, then they must record LDM code 404 in their ILR.

122. The apprenticeship service will store this information, double check there is still an employer approval and trigger the 30% milestone one payment.

123. The payments will be available in the provider’s monthly payment report on SLD and on the apprenticeship service for employers.

124. When the provider has delivered 100% of the delivery hours, 70 hours in this scenario, then they must record the completion in their ILR. In order to receive the remaining 70% milestone two payment, an actual end date needs to be applied, completion status “2 – completed” and outcome status “1 – achieved”.

125. The apprenticeship service will store this information, double check there is still an employer approval and trigger the 70% milestone two payment.

126. Providers must keep the LDM codes 403 and 404 in their ILR to ensure we still consume the data within the apprenticeship service and to ensure the milestone one payment is not clawed back.

127. Depending on the employer’s levy status, payments to the provider will be funded by the following:

• Employer A – pays the levy and has sufficient funds in their employer account to cover the costs of training. 100% of the payments is used from the employer’s account.

• Employer B – does not pay the levy. 100% of the payments will be government funded and no co-investment is needed

• Employer C – pays the levy but has insufficient funds in their employer account. We use the funds in the employer’s account first. If the value of a milestone payment is more than the levy remaining in an employer’s account, we will use all available levy and the remaining balance will be co-invested, with Government funding as 95% of the remainder, and 5% of the remainder due from the employer