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Youth Contract


Updated 17 December 2012

Youth Contract – Wage Incentives

What is the wage incentive element of the Youth Contract?

From 2 April 2012 and over three years of the Youth Contract, employers are able to take advantage of up to 160,000 wage incentives. These are worth up to £2,275 each where they employ a disadvantaged or disabled 18 to 24 year old through Jobcentre Plus or from the Work Programme for at least 26 weeks.

From 30 July 2012 changes to the scheme mean that in 20 designated areas of high youth unemployment wage incentives are available sooner, prior to young people joining the Work Programme. In these areas, employers will be able to claim wage incentives via Jobcentre Plus where they employ an eligible, unemployed 18 to 24 year old who lives in one of 20 local authority areas.

From 17 December 2012 the approach taken in those 20 areas was extended to cover the entire network of Jobcentres.

What is the aim of the wage incentive scheme?

Wage incentives allow the Department for Work and Pensions to incentivise the employment of young disadvantaged or disabled unemployed persons participating on the Government’s primary contracted employment programme: the Work Programme. From 30 July 2012 they also incentivise the employment of young, disadvantaged and disabled people who live in 20 designated youth unemployment "hotspots".

From 17 December 2012 the approach taken in those 20 areas was extended to cover the entire network of Jobcentres.

How are wage incentives claimed?

Work Programme providers and Jobcentres will work with employers to identify employment opportunities and issue claim forms when an eligible 18 to 24 year old starts eligible employment. The employer then claims the payment from DWP who will validate the claim and make the payment into the employer’s bank account.

Wage incentives are a scheme notified under the EC's General Block Exemption Regulation (GBER), State Aid reference no: 34677(2012/X)

The aim of the Scheme is to allow the Department for Work and Pensions to incentivise the employment of disadvantaged or disabled 18 to 24 year olds.