Policy Guidance Note: Training Levies

Support to VET Financing – Policy Guidance Note: Training Levies

A note to guide the introduction of training levies as part of VET finance reform.

Short description:

The training levy is an important source of VET funding, and although it is ‘imposed’ rather than ‘established’ through voluntary agreement, stakeholder dialogue remains essential for its successful introduction and implementation. It is advisable to use this Guidance note in combination with the ETF VET Financing Prism, which provides a basis for developing multi-stakeholder dialogue on VET finance reform in accordance with principles of good governance. The Financing Prisms models VET finance in terms of three key activities: the mobilisation and allocation of resources along with management of the VET financing chain.

This policy note is a resource in VET reform processes and covers key issues in the design of the levy. For example, is the levy imposed equally on all companies or differently depending on the category of the organisation? What thresholds or percentages apply? Is it a direct tax, a tax exemption or part of a ‘train or tax’ requirement, whereby companies have the choice to spend it on the training of their choice or contribute to a training fund to be spent as the government decides? What happens to the money raised? Does it go into a dedicated fund? How is the money in this fund distributed – to which institutions or programmes and on what basis? Is it to be used only for training or can it also be utilised for labour market measures, as in the case of Hungary where levied funds go into a dedicated ‘Labour Market Fund’ from which all labour market activities are financed.

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