Delivery – 2016

Delivery – 2016

Last updated 9 February 2017
Last updated 02/09/2017

We are in the process of updating these fund pages for 2017.

For the 2017 conditions for SAC level 3 and above funding (SAC3+), refer to:

Generic conditions that relate to all on-Plan funds

Specific conditions that relate to this fund only


This page sets out the delivery requirements for Student Achievement Component (SAC) funding for provision at level 3 and above (SAC3+). 

It has information about establishing a course or qualification, charging fees and course costs, the Annual Maximum Fee Movement (AMFM) and subcontracted delivery.

Establishing a course or qualification

Equipment, infrastructure and hardware

A tertiary education organisation (TEO) funded for Student Achievement Component (SAC) for provision at level 3 and above on the New Zealand Qualifications Framework (NZQF) (for this website page, referred to as SAC3+) is required to provide the necessary equipment, infrastructure, and hardware required to deliver its courses.

“Equipment, infrastructure, and hardware” are items that can be used by successive intakes of students.  They do not include personal items that are provided for individual students' use that the TEO does not retain for the next intake of students.

A TEO must not charge for equipment, infrastructure, and hardware by including in the costs any fee, compulsory course cost, or compulsory student service fee, charged to a student.  It also must not require a student to meet the costs through the "course-related costs" component of the Student Loan Scheme as a condition of the student's enrolment. See Condition SAC3+015.

However, in considering what equipment should be provided, a TEO should also consider the information about inducements, in Condition SAC3+019

Overseas travel

A TEO must not use SAC3+ funding to meet the costs of overseas travel for students, or require students to meet the cost of the travel by accessing the Student Loan Scheme, unless the overseas travel is academically essential. See Condition SAC3+014.   

The purpose of this restriction is to ensure public funds are spent appropriately, as any overseas travel needs to be a legitimate academic requirement of the course of study or training.  This also reduces the likelihood that students may enrol in a course in order to access subsidised overseas travel.

If a TEO wishes to include overseas travel within its course, it must submit an application to us demonstrating that the travel is academically essential.

We will consider the following factors:

  • is the overseas travel integrally linked to the stated outcomes of a course?
  • is the course a compulsory requirement of a qualification and/or major?
  • are the academic outcomes for the course achievable in any other manner in New Zealand?
  • is the course or qualification aligned to the Tertiary Education Strategy?

Charging fees and course costs

Setting fees and course costs for new courses

When a TEO establishes a new course, it must contact us to have the course approved for SAC3+ funding (see the Qualifications and courses page). As part of that process we receive information about the fee the TEO proposes to charge. 

Before we will approve the course for SAC3+ funding we will check if the course is a new course, or replacing an existing course, for the purposes of enforcing the Annual Maximum Fee Movement (AMFM), as described below.

New courses

The TEC, in consultation with TEO representatives, has established criteria for when a course can be considered “new”.  A new course is one that is newly developed and entered into our system for the first time, or an existing course which:

  • is dormant, meaning:     
    • it has not been delivered by the TEO for at least two calendar years and     
    • no fee increases have been entered into the Services for Tertiary Education Organisations system (STEO) within that period
  • has a change to the credit value of the course, either changing by five credits or more, or 15% or more, whichever is the greater
  • has a changed the NZQF level, or
  • has a change to the funding category.

Note: These criteria are different from those included in Condition SAC3+011 about what is a “significant change” for the purposes of entering qualification information into STEO. This is because these criteria are looking at a change or changes to a course for the purposes of setting fees.  We still require the information about the courses and qualifications to be entered into STEO and the Single Data Return (SDR) in accordance with the SDR Manual.

If the course is new, we will then consider if the fee or course cost for the new course is consistent with the fees and course costs charged for existing similar courses on a dollar per equivalent full-time student (EFTS) unit basis.

We expect the fees or course costs to be in the middle of the range of fees and course costs charged.

Some courses do have higher than usual costs and therefore justify higher than usual fee/course costs.  If the TEC is concerned about the level of fees or course costs proposed to be charged to students, we may discuss this with the TEO.  We expect TEOs to be able to justify unusually high fees to ensure that access to public funding for those courses continues.

Substitute courses

To ensure that TEOs do not establish new courses to avoid the AMFM, Condition SAC3+022 prevents a TEO from charging a domestic student a fee for a new SAC-funded course, established by a TEO in substitution for an existing course dealing with the same or similar subject matter, at the same or similar level on the NZQF, that is more than the AMFM. 

In 2016, the AMFM is a cap of 3% above the fee that the TEO charged domestic students in the previous year for the course that is being substituted. In 2015, the AMFM was set at 4%.

“New SAC-funded courses is established by the TEO in substitution for an existing course dealing with the same or similar subject matter, at the same or similar level on the NZQF” means that a SAC-funded course:

  • is replacing an active course, meaning:     
    • it has been delivered by the TEO within the past two calendar years, and     
    • fee increases have been entered into STEO within that period, and
  • has not changed the percentage of credits in the course that it is substituting, or has changed by fewer than five credits or less than 15%, whichever is fewer, and
  • has not changed the NZQF level of the course that it is substituting, and
  • has not changed the funding category of the course that it is substituting.

A course may have other changes, including changes to the NZSCED code or the timeframe to complete the qualification, or a number of small changes that together create major change.  We will consider these changes on a case-by-case basis upon request to consider whether the course is new and not a substitution for an existing course.

We acknowledge that courses will be changing as a result of the New Zealand Qualifications Authority (NZQA) targeted review of qualifications (TRoQ). If you require any assistance in determining the appropriate level of fees for your newly developed courses please contact our Sector Helpdesk.

The Annual Maximum Fee Movement (AMFM)

The Annual Maximum Fee Movement (AMFM) policy sets limits on fees that TEOs can charge students. Its purpose is to promote affordability of study for students while allowing TEOs some flexibility in setting fees. 

The AMFM applies to SAC3+ courses:

  • funded in a previous year (or years), and
  • established by a TEO in substitution for an existing course on the same or similar subject matter, at the same or similar level on the NZQF, and
  • with fees that all domestic students are required to pay.

From 2011 to 2015, the AMFM was set at a 4% increase each year. This reduced to 3% for 2016.

The Minister for Tertiary Education, Skills and Employment has determined that for 2017 the AMFM is set at 2%. An additional 2% is permitted for those TEOs who successfully apply for an exception.

The AMFM for 2016 for Information and Communications Technology Graduate Schools (ICT Graduate Schools) has also been set at 2%. 

NOTE: fee increases above the AMFM are by exception only – see below for information about how to apply for an exception to the AMFM. Fee increases may only be applied annually to a course offered in the previous year. Fees for courses not offered in the previous year, and where the AMFM was not applied, are not eligible to ‘catch up’ in the following year.

Exceptions to the AMFM for 2017

You may apply for an exception to the AMFM and be approved to increase your fees by up to an additional 2% above the AMFM already permitted. We may only grant an exception to the AMFM policy under exceptional circumstances. You should consider carefully whether placing an additional fee burden on students is the most appropriate way of addressing financial issues.

The exception criteria for 2017 are specified in Tertiary Education (2017 Annual Maximum Fee Movement) Notice 2016.

We will only grant an exception if all the following criteria are met:

  • you are unable to support the course while remaining financially viable
  • for a course at levels 3–8 on the NZQF which is part of a programme leading to a qualification, the completion rate for that qualification met or exceeded the median performance benchmark for that level in the previous year
  • you can demonstrate that the course is in some way unique or special (for example, there are no local alternatives to the course available) and
  • not allowing the exception will prevent you from making a significant contribution to the achievement of one or more of the Government's priorities, as set out in the Tertiary Education Strategy 2014–2019. 

Applications for exceptions are considered annually. 

How to apply for an exception to the AMFM

You must apply for an exception to the AMFM policy using the guidelines and forms below.

This application process applies only to courses that start between 1 January 2017 and 31 December 2017.

Exception information for any courses that start in 2018 will be made available during 2017.

Applications must be made using the following forms and templates:

The “exception application assessment template” contains the key decision points that we will use for assessing applications. Further information is available in the “application guidelines”.  

Submitting an application for exception

Applications for an exception to the AMFM policy for courses that start in 2017 are due no later than Friday 21 October 2016. We expect to make a decision in November 2016.

You must submit your applications electronically to our Sector Helpdesk at

Please include in the subject line: 2017 AMFM exception applications.

We need to receive any submissions from student bodies no later than one week after your application. Student body submissions should be sent electronically to the Sector Helpdesk, using the subject line: 2017 AMFM exception application – student body submission.

Subcontracted delivery

The TEO must not subcontract delivery of any programme, training scheme, component course or part of a course, unless we have approved the subcontracted delivery as set out in Condition SAC3+023.

Subcontracting refers to a situation in which a provider uses SAC3+ funding to pay another organisation to deliver teaching or assessment on its behalf.  This excludes:

  • teaching and learning activities contracted to individuals or organisations that are not TEOs (for example, an employee on a fixed-term contract, an honorary staff member, or a contract for teaching and learning services with a subject-matter expert for part of a programme)
  • research activities or postgraduate research supervision
  • learning that occurs within vocational placements such a workplace placement or practicum.

TEOs can contact us to discuss any proposed contracting arrangements to determine whether or not these would be considered subcontracting.

TEOs are required to seek our approval to subcontract delivery as we may have concerns about the relevance, quality, or delivery of the provision, or concerns about the subcontracted party.

A TEO that has sought, and been approved, for a subcontracting arrangement must ensure that the subcontracted party does not further subcontract the delivery. The TEO that we fund directly remains accountable to us for the use of the SAC3+ funding and must comply with any conditions imposed by us on the approval of the arrangement.

Ideally, a TEO wanting to subcontract delivery would seek approval for the arrangement during the development of its Investment Plan.  If a TEO is seeking approval during the Investment Plan period, it should contact its Investment Manager, or the Sector Helpdesk.