2023 funding rates – Unified Funding System

2023 funding rates – Unified Funding System

Last updated 23 February 2023
Last updated 23 February 2023

To support the largest transformational change to the vocational education and training (VET) sector in 30 years, a new Unified Funding System (UFS) was introduced on 1 January 2023.

In December 2021, Cabinet agreed to the high-level design of the UFS (PDF, 806 KB). In April 2022, the Minister of Education and the Minister of Finance approved the funding rates for UFS for 2023. The UFS rates for 2023 are consistent with Cabinet’s previous decisions and will improve success and support for learners in more relevant work-based training.

The UFS delivers funding in a completely new way to the VET sector through three components:

  • delivery component (approximately 85 per cent of funding) and based on a combination of subject categories and mode of delivery
  • learner component (approximately 7 per cent) to deliver increased funding to support learners who have been historically not been well served by the current system
  • strategic component (approximately 8 per cent) which will not be linked to learner numbers but available to support ensuring a national network of provision for VET and funds to develop and maintain programmes.

2023 UFS delivery component rates

Delivery component funding is volume-based and is calculated based on subject and how the delivery occurs (mode of delivery).

The modes of delivery are designed to reflect how the learning takes place, recognise the different cost structures involved in delivery, and promote fit-for-purpose training.

There are six subject categories in the UFS that apply to both provider-based and work-based learning and recognise the different cost structures that come with different types of delivery. 

 

Mode of delivery / Equivalent Full-Time Learner (EFTL)

Subject categories

Provider-based

Extra-mural

Work-based

Pathway to work

Assessment & Verification

Humanities, Business and Social Service Vocations (F1)

$5,574

$4,881

$5,297

$6,412

$1,541

Trades, Creative Arts, Information Technology and Health-related Professions (F2)

$8,863

$4,881

$7,270

$9,043

$1,541

Agriculture, Engineering, Health Sciences and Science (F3)

$9,978

$4,881

$7,938

$9,935

$1,541

Pilot Training and Priority Engineering (F4)

$12,208

$4,881

$9,276

$11,719

$1,541

Foreign-going Nautical and Specialist Agriculture (F5)

$16,723

$4,881

$11,986

$15,330

N/A

Te Reo and Tikanga Māori (F6)

$6,770

$6,770

$6,770

$6,770

$1,541

 

2023 UFS learner component rates

Learner component funding is calculated based on the enrolments of four groups of learners who traditionally have not been well served by the VET system. They are:

  • learners with low prior achievement
  • disabled learners
  • Māori learners
  • Pacific learners.

The learner component is calculated based on the data relating to learners in all modes of delivery (of the delivery component) aside from assessment and verification.

Learner component

Learner group

Funding rates /EFTL

Learners with low prior achievement

$1,233

Disabled learners

$1,233

Māori and Pacific learners level 7

$338

Māori and Pacific learners to level 6

$141

The learner component incentivises providers to support the unique needs of all their learners through set performance expectations, with incentive payments paid to TEOs on achievement. The TEC is taking a phased approach to implementing these incentive payments, with an initial focus in 2023 on implementing it with a small number of TEOs (but those with significant levels of learner component funding), then rolling out to all TEOs in 2024. In 2023, those who are not taking part in the targeted implementation will receive the full amount of learner component funding. However, all TEOs will receive part of their funding allocation under the “Learner Component – Performance element”.

 

2023 UFS strategic component rates

The strategic component is non-enrolment-based funding aimed at supporting the sector to respond to national and regional skills priorities and to develop and maintain programmes.

Strategic component

Subsector

For regional and national skills priorities

Programme Development and Maintenance Fund (PDMF)

Share

Funding

Share

Funding

(millions)

(millions)

Te Pūkenga

70%

$26.611

60%

$22.810

Private Training Establishments (PTEs)

30%

$11.405

30%

$11.405

Wānanga

N/A*

N/A

10%

$3.802

Officials are working with the wānanga through a separate workstream on funding to recognise their unique role and contribution, including where this relates to VET.

Initially, the funding for PTEs will also support a two-year transition approach focused on enabling strategically important provision to adapt to the new incentives offered by the UFS.

 

Related content

Minister’s Budget 22 announcement

TEC news story on UFS funding rates