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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1 NICs: Earnings of employees and office holders: Training and similar costs: Employment Retention and Advancement Scheme (ERA) payments

Regulation 25 and paragraph 8 of Part VII of Schedule 3 to the Social Security(Contributions) Regulations 2001

The Employment Retention and Advancement Scheme (ERA) commenced in October 2003.

The scheme was introduced to help people find and keep jobs and to undertake additionaltraining needed to help them progress to better jobs.

Two types of payment are available under ERA:

  • a full-time work bonus - payable as a lump sum to participants in the scheme who find work and work for an average of 30 hours a week for 3 or 4 months out of a 4 month period. Payments can last for up to 2 years.
  • a training bonus - payable when a client successfully completes an approved training course. The payment is computed by multiplying the time spent on the approved training by the National Minimum Wage (subject to a maximum figure).

Legislation was introduced with effect from 1 October 2003, in the form of paragraph 8of Part VII of Schedule 3 to the Social Security (Contributions) Regulations 2001, toexclude from liability for NICs any payments made to a participant in the ERA. There istherefore no liability for Class 1 NICs on either the full-time work bonus or trainingbonus payable under the scheme.