Delivery component – Unified Funding System

Wae whakarato – Unified Funding System

Last updated 23 February 2023
Last updated 23 February 2023

The delivery component comprises the bulk of the unified funding system and is now referred to as DQ3-7. It replaces SAC funding for levels 3-7 (non-degree) and all funding from the Industry Training Fund.

The delivery component is one of three funding components in the unified funding system (UFS) for vocational education and training. For information on the other two, see learner component and strategic component.

About the delivery component

The delivery component comprises the bulk of the unified funding system and is now referred to as DQ3-7. It replaces SAC funding for levels 3-7 (non-degree) and all funding from the Industry Training Fund.

This component supports education delivery in a new way. It is volume-based and considers not only the subject of the delivery but also how it is delivered – that is, in a classroom, in the workplace or online.

This component seeks to enable and encourage providers to grow work-integrated learning pathways which meet learner, employer and community needs. This means provider-based learners should be able to easily access work-based training as part of their programmes, and employers and work-based learners will receive greater support from providers.

How is funding calculated?

Funding is allocated for all education and training at levels 3-7 (non-degree) and all industry training based on the subject, how delivery occurs (mode of delivery), and the amount of learning (common across all modes). See below for more information on these three key factors.


Subject funding rates have been simplified and consolidated. There are five subject-rate groupings and these will apply to both provider-based and work-based learning. Different funding for different subjects for work-based learning recognises the different cost structures of different types of training. The groupings are:

  • Humanities, business and social service vocations
  • Trades, creative arts, information technology and health-related professions
  • Agriculture, engineering, health sciences and science
  • Pilot training and priority engineering
  • Foreign-going nautical and specialist agriculture
  • Te reo and tikanga Māori


There are five modes of delivery that reflect where and how a learner is receiving learning. A programme can be made up of one or more modes. This is to allow learners and employers to access learning opportunities in the way that is best for them and to move seamlessly between ways of learning. The five modes are:

  • Provider-based
  • Extra-mural
  • Work-based learning
  • Work-based learning - pathway to work
  • Assessment and verification.

Amount of learning

In 2023, we will continue to use EFTS and STMs to link funding to learning undertaken.

We are currently developing a new shared unit of funding across industry training and provider-based study. We will work closely with the sector to ensure this is workable, understandable and fair.

What does the delivery component support?

The delivery component supports the delivery of education and training in all settings, including at providers and workplaces.

Who is eligible for funding under the delivery component?

We are making learners’ eligibility for tuition subsidies consistent across all of the UFS. The current provider-based eligibility rules will apply to all learners. For other modes, this means there will be two key changes to eligibility.

The two changes are:

  • Adding self-employed, contractors and volunteers: We are extending funding for work-based training beyond employees to include others in the workplace, such as the self-employed, contractors and volunteers. This aligns with the Reform of Vocational Education outcomes by promoting flexible and ongoing lifelong learning
  • A domestic focus: We are removing eligibility for training subsidies for legally employed individuals who are not citizens, residence class visa holders, or otherwise classified as domestic tertiary students. Employers can still access training for these individuals but the cost of this training is no longer government subsidised. This change aligns with the current approach to immigration, incentivising employers to develop local workforces before seeking to source labour from overseas.

There is an exemption scheme to allow some non-domestic learners to be eligible for funding for work-based learning in specific training areas. Further information is available at Exemptions scheme for non-domestic learners in work-based learning.

Why is te reo and tikanga covered?  

The UFS covers all provision at levels 3-7 and all industry training which includes te reo and tikanga Māori at these levels. Officials are currently undertaking a review of funding for te reo Māori across tertiary education. In the delivery component, tuition subsidy funding rates for te reo and tikanga Māori provision will be maintained at no less than their current funding rate, regardless of the mode of delivery. This approach recognises the Crown’s Te Tiriti o Waitangi/Treaty of Waitangi obligations to actively protect te reo and tikanga Māori as taonga and the importance of developing any substantive changes to the funding system for these subjects in partnership with Māori.

From when is the delivery component funding available?

From 2023, funding allocations are calculated using the new delivery modes and categories.

Modes of delivery

Relevant information