Funding and payments

Funding and payments

Last updated 11 October 2018
Last updated 11 October 2018

This page provides information about: how Youth Guarantee funding is allocated, flexible funding for additional delivery, funding rates and how funding is calculated. There is also information about payment, funding recoveries and transport assistance funding.

Funding

The Youth Guarantee funding mechanism is issued by the Minister responsible for tertiary education. The funding mechanism outlines the general form and essential components of the fund. It provides the mandate for us to allocate the funding and what the funding can be used for, and details how we administer the fund.

Funding is agreed through a tertiary education organisation's (TEO’s) Investment Plan (i.e. it is on-Plan funding). A TEO that receives funding from the Youth Guarantee Fund is required to:

Funding for Youth Guarantee is set through the Government’s annual budget process. We determine the appropriate amount of Youth Guarantee funding for a TEO. 

Through each TEO’s Plan, we agree the mix of provision (MoP). This includes the qualifications that the funding can be used for, and the allocation of funding towards, and the volume of delivery expected for, each qualification.

We determine funded delivery volume using the equivalent full-time student (EFTS) funding model. One EFTS means the student workload that would normally be carried out by a student enrolled full-time in a single academic or calendar year.

We will fund up to one EFTS worth of Youth Guarantee provision per eligible student per calendar year. See Condition: Student eligibility under Use of YG Fund Funding for eligible students.

Change to EFTS definition from 1 January 2019

From 2019 the definition of a full-time, full-year workload (an EFTS) for a student enrolled in a level 1 or 2 Youth Guarantee qualification is 100 credits (not 120 credits).

This means that, after each SDR submission, we will pay 20% more Youth Guarantee funding for level 1-3 course enrolments delivered toward a level 1 or level 2 qualification. These payments will be made on top of approved Youth Guarantee allocations.

Our definition of one EFTS for a student enrolled in a level 3 Youth Guarantee qualification remains 120 credits.

The table below sets out the change from 2019. 

Year

Qualification level
(NZQF)

Credits per EFTS

Notional hours per EFTS

Portion of a full-time, full year workload

2018

1-3

120

1200

100%

2019

1, 2

100

1000

3

120

1200

Implications of the change

There are no system or reporting changes for 2019. See Reporting.

However, TEOs will need to track student consumption of each student’s two EFTS entitlement carefully, and the one EFTS per year limit. This is particularly relevant for students progressing from a level 1 or 2 Youth Guarantee qualification to a level 3 Youth Guarantee qualification.

Tracking needs to reflect:

  • 100 credits per EFTS for level 1 and 2 qualifications, and
  • 120 credits per EFTS for level 3 qualifications.

See Condition: Student eligibility under Use of YG Fund Funding for eligible students.

 

Funding allocation

When allocating funding, we consider:

  • whether the TEO is eligible for Youth Guarantee funding
  • the nature of the qualifications offered by the TEO
  • the region of delivery of the TEO
  • the TEO’s use of the Literacy and Numeracy for Adults Assessment Tool with students
  • the TEO’s historical delivery volumes compared to delivery commitments
  • pastoral care arrangements for students made by the TEO
  • the TEO's past performance against the Youth Guarantee performance framework, and
  • the TEO’s performance against Youth Guarantee policy settings. 

Funding rates

There are two per EFTS funding rates for all Youth Guarantee provision – the trades and non-trades rates.

The trades funding rate is $14,300 per EFTS, and applies to trades provision at levels 2 and 3 on the New Zealand Qualifications Framework (NZQF).

The non-trades rate is $10,800 per EFTS and applies to all other provision at levels 1 to 3 on the NZQF.

Each funding rate includes an $800 travel subsidy and a $500 pastoral care subsidy.

Funding per EFTS (1200 hours)

Non-Trades

Trades

Fee and course costs

$9,500

$13,000

Pastoral care subsidy

$500

$500

Transport assistance subsidy

$800

$800

Total Rate

$10,800

$14,300

Pastoral care

The pastoral care subsidy of $500 per EFTS is intended to fund a range of services tailored to the needs of individual students. This may include:

  • career planning and advice
  • specific cultural and learning support that is easy for the student to access
  • an orientation programme that informs students about access to financial assistance
  • extra-curricular activities
  • regular activities with other Youth Guarantee students, and/or
  • counselling.

Travel assistance funding

See Condition: Travel Assistance funding.

Travel assistance funding must only be used to pay for the actual cost of transport. We expect TEOs to take an "actual and reasonable" approach to the reimbursement of student travel costs. This means if a student uses:

(a)  public transport, the reimbursement of the student must be based on the appropriate concession rate, and

(b)  private transport, we recommend that the TEO contact the AA to establish a reimbursement rate on a case-by-case basis.    

If the TEO supplies the transport, the cost of the travel must not exceed 80 cents per km travelled.

Travel assistance funding that is paid directly to a student must only be used to cover or reimburse costs associated with travel to and from the Youth Guarantee course.

Records

The TEO must keep records of all student travel expenses and TEO reimbursements to students.

If the TEO supplies transport to students, it must keep records of travel expenses. All travel records are to be made available to us on request. Records must include:

  • a daily travel logbook that sets out the kilometres travelled in relation to each student, and
  • the source of funding for each student’s enrolment at the TEO (for example, whether the student is enrolled in a Youth Guarantee funded programme or otherwise).

Inland Revenue

If the TEO supplies transport, the TEO must keep records of travel expenses in line with Inland Revenue requirements.

There may be tax implications in the way that travel reimbursements are administered. Contact Inland Revenue directly for further information.

However, when reimbursing students for travel, in general, TEOs are not able to claim GST input tax on this cost because the payments are made to individuals who are not registered for GST. GST input tax can only be claimed if the TEO has incurred the cost itself and can produce a GST invoice in support of the claim.

Travel subsidy

The travel assistance subsidy of $800 per EFTS is expected to adequately meet the costs associated with normal student travel needs.

As the travel subsidy is allocated per EFTS, the TEO may cross-subsidise by using more than the per EFTS rate for some students (i.e. where they have particularly high travel expenses), and less than the per EFTS rate for others (where they do not require the full amount).

The TEO must reimburse each student within a reasonable time after they have incurred the cost.

Exceptional circumstances transport assistance funding

Exceptional Circumstances Transport Assistance (ECTA) funding is to provide additional transport assistance to students who live in relatively isolated areas who may have higher transport needs. See  Condition: Travel Assistance funding. TEOs are not required to submit additional information to us to access this funding.

ECTA funding is based on EFTS delivered and the rural isolation of the site where the delivery took place. We classify the rural isolation of TEOs’ delivery sites using a classification system developed by Statistics New Zealand. Each TEO delivery site is classified against one of eight urban/rural categories, shown below.

Based upon the urban/rural classification we provide a ‘top-up’ payment per Youth Guarantee EFTS at each delivery site as reported in each Single Data Return (SDR) submission.

Urban/rural definition

Classification

Exceptional circumstances top up rate per EFTS

Total travel subsidy rate per EFTS

Main Urban area

Urban

$0

$800

Satellite Urban area

Urban

$400

$1200

Independent Urban area

Semi-Urban

$600

$1400

Rural area with high urban influence

Semi-Rural

 $600

$1400

Rural area with moderate urban influence

Semi-Rural

$600

$1400

Rural area with low urban influence

Rural

$1000

$1800

Highly Rural/Remote area 

Rural

$1000

$1800

Area outside urban/rural profile

Unknown

$0

$800

Funding calculation

Disaggregated courses must add up to the total credit value of the qualification, but unlike Student Achievement Component (SAC) funding, Youth Guarantee is not funded at the course level.

For a trades qualification at levels 2 and 3 the funding calculation is: $14,300 x qualification EFTS value. Trades qualifications include NCEA where at least 50% of the courses are classified under SAC course classification codes - alphabetic and numeric - as C1, L1, or P1.

For a non-trades qualification the funding calculation is: $10,800 x qualification EFTS value. Non-trade qualifications include NCEA where less than 50% of the courses are classified as trades courses.

Specifically, we calculate a TEO’s consumed funding using:

  • the number of valid domestic student enrolments, measured by equivalent full-time students (EFTS), and
  • the qualifications, and their component courses, in which a valid domestic student is enrolled.

To calculate a TEO’s consumed Youth Guarantee funding, we use the following elements:

  • the metric (EFTS value)
  • course classification
  • qualification funding category (trades/non-trades which may also depend on level on the NZQF), and
  • qualification funding rate

Example:

Step

Funding calculation 

Example

1

Assign the qualification an EFTS value

A TEO’s NZ2104 New Zealand Certificate in Food and Beverage (Level 3) obtained through half a year of academic year study has a value of 0.5 EFTS.

Note: We use 120 credits per EFTS for all qualifications in STEO.

2

Assign the qualification a funding rate

This is determined in conjunction with us. The rate will be trade or non-trade, depending on whether the majority of course EFTS are trades or non-trades.

3

Disaggregate the qualification into courses

Calculate the EFTS factor of each course (Note: We use 120 credits per EFTS for all courses in STEO)

Classify the courses

The programme is disaggregated into three courses.

Each course has an EFTS factor of 0.1667 EFTS.

The Course Classification Guide (PDF, Kb) is used to classify the subject matter of these courses as # 22 (Trades 2 - all trades courses other than for industry training trainees).

4

Apply the funding category

Refer to Funding category (CATEGORY) under Information about courses on the Qualifications and courses webpage:

The funding category alphabetic code is used to determine the category of the course as P (Trades2[#22], Vocational Training for Industry[22.1].

The funding category numeric code is used to determine the category of the course as 1 (non-degree course with no research requirement, including certificates and diplomas). 

5

Apply funding rates

The funding rate for provision towards a trade qualification, including pastoral care and transport, is $14,300 per EFTS.

6

Multiply the funding rate by the number of valid enrolments

For 10 students on each of the three courses, each course attracts Youth Guarantee funding of $23,838.1 (excl. GST) calculated as 0.1667 x $14,300 *10.

This means the programme attracts $71,514.30 funding if 10 students enrol in each of the three programme courses.

Note: From 2019, for level 1 and 2 qualifications, we pay a 20% premium on top after each Single Data Return (SDR). This is to acknowledge our definition of an EFTS being 100 credits for level 1 and 2 qualification delivery.

Calculating funding for level 1 and 2 qualification provision

From 2019 onwards, we recognise that 100 credits is a full-time, full-year workload for a student enrolled in a level 1 or 2 Youth Guarantee qualification (one EFTS).

As our information systems are not changing, all Youth Guarantee delivery volume and funding amounts will continue to be calculated using one EFTS = 120 credits.

So, if a student completes a 100 credit non-trades qualification, our information system will calculate that the student consumed 0.8333 EFTS ($9,000) instead of the correct 1.0 EFTS ($10,800).

To make up the funding difference, we will pay a 20% premium after the delivery has been reported in the Single Data Return (SDR), for EFTS delivered toward level 1 and 2 qualifications.

The amount paid will be determined by the volume of levels 1-3 course enrolment EFTS that lead towards level 1 and 2 Youth Guarantee qualifications, as reported in the SDR.

Calculation example

The table below shows example funding calculations for the premium using level 1 or 2 non-trades qualifications of 120 credits, 100 credits and 60 credits.

Level 1 and 2 Qualifications

Programme credits

120

100

60

Value of YG delivery
(one EFTS = 100 credits)

120 credits = 1.2 EFTS = $12,960

100 credits = 1.0 EFTS = $10,800

60 credits = 0.6 EFTS = $6,480

TEC system calculation
(one EFTS = 120 credits*)

120 credits = 1.0 EFTS

1.0 x $10,800 = $10,800

100 credits = 0.8333 EFTS

0.8333 x $10,800 = $9,000

60 credits = 0.5 EFTS

0.5 x $10,800 = $5,400

YG premium payment

 

1.0 x $10,800 x 20% = $2,160

0.8333 x $10,800 x 20% = $1,800

0.5 x $10,800 x 20% = $1,080

Total funding paid
(one EFTS = 100 credits)

$10,800 + $2,160 = $12,960

$9,000 + $1,800 = $10,800

$5,400 + $1,080 = $6,480

* Used in STEO, the SDR and Ngā Kete information products.

Also see Reporting under Monitoring and reporting.

Recognition of prior learning / prior achievement

Recognition of learning / prior achievement relates to previous study or experience (prior achievement) relevant to a programme that a student is currently undertaking. It enables a student to proceed with his or her study without repeating aspects of the qualification previously studied, or re-learning skills the student has already achieved through past work or other experience.

Recognition of prior learning (RPL), and credit recognition and transfer (CRT), are forms of recognising learning / prior achievement. The New Zealand Qualifications Authority (NZQA) provides information and guidelines on recognition of learning / prior achievement for TEOs.

RPL and CRT for Youth Guarantee students

Students may have already some knowledge of, or achieved, some courses or course content prior to enrolment in a Youth Guarantee funded qualification.

The TEO must recognise this prior learning and adjust the courses in the student’s programme. The TEO must not claim Youth Guarantee funding for:

  • recognising this prior learning, or
  • delivering tuition where the student already has this prior learning (i.e. skills and/or knowledge).

See Condition: Recognised prior learning under Use of YG Fund Funding for eligible students.

We expect the TEO to engage with students at enrolment to determine whether they are likely to have existing knowledge, skills, and attributes that can contribute to the graduate outcomes of the qualification.

If the student has achieved course content previously, the TEO must work out the EFTS factor of the unit or achievement standards previously credited to the student (using the 120 credits per EFTS calculation). The TEO must then subtract this from the standard course EFTS factor. The revised EFTS factor is the value that the TEO should then submit in the enrolment file of the SDR, in the FACTOR field, for that student.

Re-enrolling a Youth Guarantee student

Where a Youth Guarantee student requires further study to complete their qualification, their study can only be to complete courses that they have not yet passed. This can include content not yet studied or content studied and assessed, but requiring a re-sit. 

Note: For students who are 20 years old, see A student who turns 20 years old while enrolled is not eligible to re-enrol under Student eligibility.

For example:

A TEO enrols a student in all courses linked to a 60 credit (0.5 EFTS) level 3 qualification. The sum of the course EFTS factors is 0.5 EFTS.

The student passes/achieves 30 credits from the 60 credit course enrolments. The TEO is funded 0.5 EFTS, for the 60 credits of courses the student was enrolled in.

The TEO re-enrols the student in a second period of study for the remaining 30 credits not yet achieved. The TEO is funded 0.25 EFTS for the 30 credits of courses the student was re-enrolled in.

The student successfully completes the courses and is awarded the qualification.

The student will have received 0.75 EFTS worth of provision (90 credits), and the TEO will be funded for 0.75 EFTS delivery (0.5 + 0.25 EFTS) (assuming funding conditions are met for each course enrolment). Note: the TEO will report 0.25 EFTS (30 credits) unsuccessful course completions, and 0.5 EFTS (60 credits) successful course completions.

Calculating EFTS remaining vs consumed

To determine the exact value of the EFTS remaining for a returning student, the following formula should be used:

Qual EFTS value - (credits completed/total qual credits x qual EFTS value) = remaining EFTS

For example:

0.5 - (30/60 x 0.5)

= 0.5 – 0.25

= 0.25 remaining EFTS

Notes: 

You will need to track consumption of Youth Guarantee EFTS for the one EFTS per learner per year, and the two EFTS per learner in total, limits. Calculate this using 100 credits per EFTS for provision occurring on or after 1 January 2019 and that leads towards level 1 and/or 2 Youth Guarantee qualifications.

You will need to ensure that when a student needs more time to complete their qualification, other students are enrolled to ensure you deliver fully on your mix of provision (MoP) EFTS commitment and consume all funding for the year.

Payment

Most Youth Guarantee funding is paid in monthly instalments. The payment amounts are in equal instalments from January to June, and in equal instalments from July to December.

After each Single Data Return (SDR) submission we pay (and recover):

  • Youth Guarantee Exceptional Circumstances Travel Assistance funding, and
  • from 1 January 2019, a premium payment for course enrolments leading to award of level 1 or 2 Youth Guarantee qualifications.

Flexible funding

We fund eligible TEOs for eligible Youth Guarantee provision above the amount the TEO has been approved to deliver. This is to provide TEOs with flexibility to meet additional student demand. See Condition: Flexible funding for further information.

Flexible funding:

  • is payable for provision towards qualifications that we have agreed to fund in your mix of provision (MoP)
  • does not mean we have changed your approved funding allocation, and
  • is subject to the conditions that we have imposed on your funding.

The external evaluation and review (EER) category referred to in  Condition: Flexible funding will be the highest published EER category for the TEO during the funding year to which flexible funding is being applied.

Flexible funding is calculated using the December Single Data Return (SDR). Payments are made in March of the following year.

Funding recoveries

We are required to recover funding where the results of an audit, reporting or statistical return show a TEO has under-delivered against expected performance targets as described in their agreed Investment Plan. This will include recovery of funding claimed for ineligible students, see Condition: Repayment of YG Fund Funding.

Recovery of Youth Guarantee funding is calculated on dollars consumed and funding is recovered for delivery below 100% of the TEO’s approved allocation. In practice, this means funding consumed is calculated at the programme (qualification) level by applying the applicable trade/non-trade rate to the number of EFTS delivered. This includes the travel subsidy component of $800 per EFTS and the pastoral care component of $500 per EFTS.

The difference between the total funded (dollar) amount in the approved Plan and the total delivered (dollar) amount will be recovered. In addition, funding is recovered for reported delivery that is ineligible for funding.

For example:

A student was enrolled in a Youth Guarantee programme comprising a 0.7 EFTS trades course, and a 0.6 EFTS non-trades course. This results in a total enrolment value of 1.3 EFTS, with 0.3 being recovered. The amount to be recovered would be calculated as follows:

To calculate value of 1 EFTS

0.7 EFTS at the trades rate

$10,010

0.3 EFTS at the non-trades rate

$3,240

Total value of 1 EFTS

$13,250

To calculate the amount to be recovered

Remaining 0.3 EFTS at the non-trades rate:

$3,240

TEOs are expected to maintain sufficient cash reserves so they are able to repay any recoveries due on demand.  

Recoveries are based on the December SDR and occur early in the following year.

Suspending or revoking funding

Under section 159YG of the Education Act 1989 (the Act), we may suspend or revoke some or all funding given under section 159YA of the Act if we are satisfied on reasonable grounds that:

  • when measured against performance indicators, the TEO has not achieved, or is not achieving an outcome anticipated in its Investment Plan for a tertiary education programme or activity in relation to which funding has been given under section 159YA of the Act
  • the TEO has not complied, or is not complying with a condition on which funding has been given under section 159YA of the Act, or
  • the TEO has not provided, or is not providing, adequate and timely information required by the TEC or Ministry of Education under section 159YC of the Act.   

If a TEO has its funding approval revoked in accordance with section 159YG of the Education Act 1989, the unspent portion of funding is repayable to the TEC on demand (see Condition: Suspension or revocation of YG Fund Funding). We may off-set the amount against any funding payable to the TEO. 

Principles for 2019 investment

We will calculate your indicative allocation using prior performance data

This will include:

  • delivery volume (by dollar amount), and
  • course completions.

Your previous performance against these measures will determine your indicative allocation.

Your eligibility to receive funding is subject to criteria outlined in the relevant funding mechanism.

Please note, your indicative funding allocation is not a guarantee of your final funding allocation.  

Your final allocation will be based on your Investment Plan, performance and other strategic considerations

We will consider your performance information alongside strategic priorities as outlined in Plan Guidance, the Tertiary Education Strategy (TES), the Focus Area Briefs and Investment Briefs

We will also consider your use of the Literacy and Numeracy for Adults Assessment Tool. 

Based on these considerations your allocation may stay the same or decrease. Alternatively, you may receive a nil allocation.

We will only consider an increase to funding where the tertiary education organisation (TEO) has requested it and they are high-performing. We will address requests for funding increases as part of our engagement process following the submission of draft Investment Plans or proposal if you are Plan exempt.

We may take into account any other measure that we determine to be appropriate when allocating funding.  

See our Investment Briefs for more information.

We will recover for under-delivery or for funding you weren’t entitled to receive

See Funding recoveries