Government error sees apprentices given extra loan cash

Apprentices taking interest-free government loans have had a nasty surprise after a government blunder.

Apprentices banked extra cash in their monthly loan instalments after a government error. Picture: iStock

• Decline in apprentices amid skills crisis

Apprentices received an early Christmas gift after a federal government blunder that saw them bank extra cash in their monthly loan instalments.

The government blamed an administrative error for the surprise windfall.

But the gift will be followed by a New Year’s hangover – the extra cash will be added to their long term debts.

The error came in the Australian Apprenticeship Support Loans scheme, where apprentices can take on interest-free loans of up to $25,374 spread over four years to help with living costs until they are qualified.

To maintain the real value of the loan, the amount is indexed annually in line with the Consumer Price Index.

People who took out these loans received higher monthly instalments after the indexation rate was incorrectly set at 4.7 per cent instead of 3.6 per cent from July 1 last year.

The rate was corrected last month, but as it was an administrative error the government will not be seeking immediate repayment of the extra cash.

But it will be tacked on to the long-term loan total.

The Department of Employment and Workplace Relations declined to say how many apprentices had been affected nationally or inSA.

“The Department of Employment and Workplace Relations acknowledges an administrative error resulted in the incorrect indexation rate being applied to Australian Apprenticeship Support Loan instalments,” a spokesman told The Advertiser.

“We regret any issues that this may have caused.

“The department corrected the error in early December 2024, with monthly instalments reducing by between $2.24 and $8.98 for the remainder of 2024-25.”

At most, these apprentices will have been paid $53.88 more than they were entitled to, but the father of one noted: “If my son made a mistake using 4.7 per cent instead of 3.6 per cent in his calculations … I would not want to live in the house he was building.”

Originally published as Government error sees apprentices given extra loan cash