Funding and payments

Funding and payments

Last updated 17 October 2017
Last updated 10/17/2017

This page provides information about how Youth Guarantee funding is set, funding allocation, funding for additional delivery, funding rates and funding calculation. There is also information about exceptional circumstances transport assistance funding, payment and funding recoveries.


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.

A TEO that receives Youth Guarantee funding 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.

Funding allocation

Youth Guarantee is funded using the equivalent full-time student (EFTS) funding model. One EFTS means the student work load that would normally be carried out by a student enrolled full-time in:

  • a single academic year, or
  • a single calendar year.

One EFTS is equivalent to 120 credits, i.e. 1200 notional hours of learning or 100% of a full-time, full-year student workload.

We will fund up to 1 EFTS worth of Youth Guarantee provision per eligible student per calendar year.

See Condition: Student eligibility.

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)



Fee and course costs



Pastoral care subsidy



Transport assistance subsidy



Total Rate








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:

  • specific cultural and learning support
  • career planning and advice
  • extra-curricular activities
  • an orientation programme
  • regular activities with other Youth Guarantee students, and/or
  • counselling.

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.


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: Exceptional Circumstances Transport Assistance fund. 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


Exceptional circumstances top up rate per EFTS

Total travel subsidy rate per EFTS

Main Urban area




Satellite Urban area




Independent Urban area




Rural area with high urban influence




Rural area with moderate urban influence




Rural area with low urban influence




Highly Rural/Remote area 




Area outside urban/rural profile




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 (which includes NCEA where at least 50% of the courses are classified under SAC course classification codes as C1, L1, or P1), the funding calculation is: $14,300 x qualification EFTS value.

For a non-trades qualification (which includes NCEA where less than 50% of the courses are classified as trades) the funding calculation is: $10,800 x qualification EFTS value.

The reference to a course that is classified as C1, L1, or P1 means a course that is designed for a non-degree qualification with no research requirement, including a certificate and diploma, in the disciplines set out in the table below.


Relevant discipline and course classifications


Architecture (degree) [#02]
Engineering [#11]
Technology [#11]
Health Sciences [#13]
Vocational Training For Industry [#22.1]
Midwifery (3 year) [#27]
Speech Language Therapy [#32]
Medical Laboratory Science [#33]
Audiology [#35]


Agriculture (non-degree) [#01]
Horticulture (non-degree) [#01]
Osteopathy [#03.1]
Acupuncture [#03.1]
Vocational Training for Industry [#22.1]
Nursing [#24]


Trades 2 [#22]
Vocational Training for Industry [#22.1]

Qualification codes for NCEA

Where a trade or a non-trade programme will lead to award of the qualification, only one qualification code needs to be set up in STEO. For example, if it is a non-trade NCEA level 2 in Service Industries, only use code NCEP4N.

Where a trade programme and a non-trade programme will lead to award of the same NCEA level 2 aligned to a Vocational Pathway (for example, some students will be enrolled in 50% or more of P1, C1, L1 courses while other students will be enrolled in 50% or more of A1, J1 courses) the TEO needs to set up two separate qualification codes to reflect the trade/non-trade programmes.

This requirement extends to NCEA level 3 where it is delivered as both non-trades and trades for Youth Guarantee.

A TEO approved by NZQA to deliver NCEA level 2 with a Vocational Pathway needs to set this up in TEC STEO using the qualification codes below.






National Certificate in Educational Achievement L1


YG Non-Trades


Construction and Infrastructure Trade L2


YG Trades


Construction and Infrastructure Non-trade L2


YG Non-Trades


Manufacturing and Technology Trade L2


YG Trades


Manufacturing and Technology Non-trade L2


YG Non-Trades


Primary Industries Trade L2


YG Trades


Primary Industries Non -trade L2


YG Non-Trades


Service Industries Trade L2


YG Trades


Service Industries Non-trade L2


YG Non-Trades


Social and Community Services Trade L2


YG Trades


Social and Community Services Non-trade L2


YG Non-Trades


Creative Industries Trade L2


YG Trades


Creative Industries Non-trade L2


YG Non-Trades


National Certificate in Educational Achievement Trades L3


YG Trades


National Certificate in Educational Achievement Non-trade L3


YG Non-Trades

Qualification codes for qualifications delivered as both trade and non-trade

Note: Only qualifications at levels 2 and 3 can be funded at the trade rate.

Where a trade or a non-trade programme will lead to award of an NZQF qualification, enter the qualification’s NZQF qualification code in STEO.

Where NZQA has approved you to deliver both a trade and a non-trade programme (each leading to award of the same NZQF qualification), enter two qualification codes in STEO to reflect the two programmes. For example, some students will be enrolled in a programme of 50% or more of P1, C1, L1 courses while other students will be enrolled in a programme of 50% or more of A1, J1 courses.

Use the qualification code system below to enter the trade/non-trade codes in STEO.

  • “C” represents a National Certificate, whereas “Z” represents a New Zealand Certificate.
  • This is followed by the four digit NZQF code for the qualification.
  • This is followed by “T” identifying it as a trade programme (50% or more of the provision is trades), or “N” identifying it as a non-trade programme (50% or more of the provision is non-trades). 







National Certificate in Xxxxx Level 3


YG Trades


National Certificate in Xxxxx Level 3


YG Non-Trades


New Zealand Certificate in Xxxxx Level 3


YG Trades


New Zealand Certificate in Xxxxx Level 3


YG Non-Trades

Recognition of prior learning / prior achievement

Recognition of prior learning (RPL) relates to previous study or experience (prior achievement) relevant to a programme that a student is currently undertaking. RPL 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.

RPL for Youth Guarantee students

Students may have already achieved some unit or achievement standards prior to enrolment in Youth Guarantee. The TEO must not claim funding for these.

The TEO must recognise this prior learning and adjust the courses in the learner’s programme. The TEO must not claim Youth Guarantee funding for recognising this prior learning, or for delivering tuition where the student already has this prior learning (i.e. skills and/or knowledge).

See Condition: Recognition of prior learning

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. 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.

Claiming Youth Guarantee funding

There is no funding condition that sets out how much of a course a student needs to have completed in order for a TEO to claim funding for that student. To ensure that TEOs are able to claim Youth Guarantee funding in respect of a student who has not completed a full course, TEOs may claim funding for a student who has completed at least 10% (rounded up to the next whole day) or one calendar month of the course in which they have enrolled (whichever is the earlier), provided that:

  • the student meets the eligibility requirements for Youth Guarantee, and
  • all Youth Guarantee funding conditions are complied with.

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 Eligibility of 20 year olds.

For example:

A TEO enrols a student in all courses linked to a 60 credit (0.5 EFTS) 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

Note: 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. 



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.

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 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 that will be applied is the category that is current on 31 December of the funding year to which the flexible funding is applied.

Flexible funding is calculated using the December SDR. Payments are made in March of the following year to which flexible funding is applied.

Note: For 2016 flexible funding calculations, Condition YG028 or Condition YG029 will apply as appropriate.


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.

See Condition: Repayment of YG Fund Funding and ECTA 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


0.3 EFTS at the non-trades rate


Total value of 1 EFTS


To calculate the amount to be recovered

Remaining 0.3 EFTS at the non-trades rate:


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.

Note: Exceptional Circumstances Travel Assistance (ECTA) funding is subject to recovery if there is a decrease in ECTA funded EFTS between the April/August and December SDRs. 


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.