Equity funding for 2022

Equity funding for 2022

Last updated 20 May 2021
Last updated 20 May 2021

For 2022, Equity funding is being expanded for VET provision, to include all TEOs

This signals the increased focus Government funding will have on supporting learners as the Reform of Vocational Education changes are embedded. It also aligns with the objectives and priorities of the Tertiary Education Strategy (TES). For the May 2021 update go to the unified funding system page.

We expect providers and transitional ITOs to use this funding to identify and support young learners with low prior achievement (LPA), as well as underserved learners (including Māori, Pacific, and disabled learners).

TEOs should outline their support for these learner groups as part of their normal Investment Plan/funding allocation process documentation. For some TEOs this includes Learner Success Plans.

If TEOs are not submitting these documents they can expect their RMI/RA to contact them to discuss their plans for utilising this increase in Equity funding.

Where funding has been allocated to transitional ITOs, it will move to providers as transition plans are finalised and followed through.

This funding will:

  • extend the Māori and Pacific component to cover all vocational education and training (VET) provision (extended below Level 5 to include Levels 3 to 4; and into industry training);
  • Set the Māori and Pacific funding rates for VET to match the Equity Funding rate for degree-level education;
  • introduce LPA Equity Funding to support VET learners under 25 years old without a qualification at Level 3 or above on the New Zealand Qualification Framework (at all eligible TEOs, including transition ITOs); and

All TEOs with eligible VET provision and learners will receive Equity funding under the three elements (Māori & Pacific, disabilities and LPA).

What changes will TEOs notice?

1.       We are providing indicative allocations for all Equity funding for the first time since approximately 2009

Due to the expansion of Equity funding, and the need to provide key messages and expectations to the TEOs, we will be providing indicative allocations for Equity funding at the same time as all the other indicatives.

2.       There has been a change in allocation methodology for the Equity funding disabilities component for non-VET provision

The calculation for the disabilities component will now be based on historic delivery data (the previous method was based on TEOs MoPs).

This is necessary due to the need to identify VET and non-VET provision for these allocations.

3.       For 2022, we are expanding and increasing funding for the disabilities component of Equity funding

The table below sets out key information about the current state versus the new 2022 funding and eligibility.

Equity funding: Disabilities Component

Current State (2021)

Eligible Provision/

Calculation basis

Funding Rate/EFTS

Eligible Providers

All SAC EFTS NZQF levels 1 to 10; as determined by the EFTS agreed in the mix of provision (MoP) for the year of allocation

$29.06

TEIs only

New (2022)

Eligible Provision/

Calculation basis

Funding Rate/EFTS

Eligible Providers

VET provision

Total 2020 actual EFTS and STMs in VET provision

$29.41 (includes 1.2% cost adjustment)

TEIs

Transitional ITOs

PTEs

Non VET provision

Total 2020 actual EFTS in provision at Levels 1 and 2; and at Level 7 degree and above

$29.41 (includes 1.2% cost adjustment)

TEIs

4.       For 2022, we are expanding funding for the Māori and Pacific component to cover all provision at Level 3 and above, and equalising the non-degree rate to be the same as the degree level rate

The table below sets out key information about the current state versus the new 2022 funding and eligibility.

Equity Funding: Māori and Pacific Component

Current State (2021)

Eligible Provision/

Calculation basis

Funding Rate/EFTS

Eligible Providers

All Māori and Pacific SAC EFTS NZQF Levels 5 to 10

$135/EFTS Levels 5&6

$325/EFTS Level 7

$450/EFTS Level 8

All TEOs except transitional ITOs

New (2022)

Eligible Provision/

Calculation basis

Funding Rate/EFTS

Eligible Providers

VET provision

All 2020 Māori and Pacific SAC EFTS and ITF STMs in VET provision

$329/EFTS and STM

(includes 1.2% cost adjustment)

All TEOs including transitional ITOs

Non VET provision

All 2020 Māori and Pacific SAC EFTS NZQF Level 7 degree and above

$329/EFTS Level 7

$457/EFTS Level 8 and above

(includes 1.2% cost adjustment)

All TEOs except transitional ITOs

5.       For 2022, new funding will be available to support VET learners under 25 years old without a qualification at Level 3 or above on the NZQF

This is to support young learners with low prior achievement (LPA), who have much lower completion rates compared to young learners with higher prior education (Level 3 or above).

The table below sets out key information about the new 2022 funding and eligibility.

Equity funding: Support for VET learners under 25 with low prior achievement (LPA)

New (2022)

Eligible Provision/

Calculation basis

Funding Rate/EFTS

Eligible Providers

All 2020 VET SAC EFTS and ITF STMs where learners are under 25 and have LPA

$329/EFTS

All TEOs, with VET provision, including transitional ITOs

6.       We are considering whether any adjustments to 2022 allocations might be required prior to finalisation. For example, to mitigate any adverse impact of Covid-19 on 2020 enrolments.

Do TEOs need to do anything?            

No, TEOs do not need to provide any additional information to TEC in order to receive the expanded Equity funding. TEOs should complete and submit their SDRs or ITR as usual.

We do expect TEOs to actively consider how they will use this funding to support their learners; to include these plans in their normal Investment Plan round documentation, including LSPs; and be prepared to discuss their approach with their RMI/RA.

Please note: if a provider receives a proposed zero allocation for their 2022 SAC Level 3 and above or Industry Training Fund allocation then we will automatically ring-fence their Equity funding until the final 2022 allocations are approved.

Providers will not be eligible to receive Equity funding if they receive a final zero allocation for the 2022 SAC Level 3 and above or Industry Training funding.

Te Pūkenga

Allocations for Te Pūkenga will be based on 2020 delivery data submitted by each of its subsidiaries.

Approach for mergers

Mergers in 2021, after indicative allocations have been issued, will be reflected in the final approved funding allocations.

FAQ for TEOs

Question: My organisation is a transitional ITO, and I note that the industry training funding increase can be used to support our learners and employers as we transition. This seems to allow for a very broad use of this funding. Are there any learner or employer related costs that it definitely can’t cover?

Answer:

We expect transitional ITOs to consider activities that will improve learner outcomes, and to work with their transition partners to ensure continuity of support, where required. If you are considering substantially changed or new activities, we encourage you to engage with your RMI to discuss this.

Question: We’re a transitional ITO now, but our arranging training will be transferring later in 2021. Can we use the industry training funding increase to retrospectively cover costs supporting learners and employers that we have already incurred and paid for in 2021?

Answer:

No. This funding is intended for activities in 2022.

Question: My organisation is a PTE, do we have to do anything to receive the disabilities top up for Equity Funding

Answer: No, you do not need to do anything to receive the disabilities top up for Equity funding.  But it is important that you continue to complete your MoP and SDRs as usual.

Question: Is the increase in Equity funding just for 2022?

Answer: The funding provided by this initiative continues through until the introduction of the UFS from 1 January 2023.

Decisions on the final form of the UFS have not yet been made, so the specifics are not available, however changes to funding categories and rates are likely to occur when the UFS is introduced from 2023.

Further information on the details of the UFS will be available as soon as possible. For the May 2021 update go to the unified funding system page.

Question: Are micro-credentials and training schemes eligible VET provision?

Answer: Yes, if they are within the scope of the VET changes to Equity funding then they are covered.