Funding and payments

Funding and payments

Last updated 31 May 2019
Last updated 31 May 2019

How Industry Training Fund (ITF) funding is set, allocated, calculated, and recovered.

Funding

The ITF 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 fund can be used for, and details how we administer the fund.

Funding is agreed through an industry training organisation (ITO’s) Investment Plan (ie, it is on-Plan funding).

An ITO that receives ITF funding is required to:

ITF funding is set through the Government’s annual budget process. We determine the appropriate amount of ITF funding for an ITO. When allocating funding, we consider:

  • whether the ITO is eligible for ITF funding
  • the nature of the programmes offered by the ITO
  • the ITO’s historical training volumes compared to training commitments
  • pastoral care arrangements for learners made by the ITO
  • the ITO's past performance with respect to ITF funding, and
  • the ITO’s performance against ITF policy settings.

Through each ITO’s Plan, we agree the mix of provision. This includes the New Zealand Qualifications Framework (NZQF) level the funding can be used for, and the allocation of funding towards, and the volume of training expected for, each level and type of training (trainees or apprentices).

Please note: An ITO may not use government funding to fund either:

  • standard setting overseas, or
  • industry-based training to learners who are employed overseas and will receive the proposed training outside of New Zealand.

 

Funding allocation

Our approach to calculating your 2020 indicative allocation for the Industry Training Fund

The purpose of Industry Training Fund funding

The Industry Training Fund subsidies formal, structured, employment-based training linked to qualifications primarily at levels 1–4 on the New Zealand Qualifications Framework (NZQF), covering New Zealand Apprenticeships, industry training and industry-training related projects.
 
Funding from the ITF is allocated during the Investment Plan process. An ITO is allocated a number of standard training measures (STMs) multiplied by the applicable funding rate. Allocations are for calendar years, and funding can be amended during the year, if necessary.

An STM is the amount of training required for a learner to achieve 120 credits (or equivalent) on the NZQF in an approved training programme. There is no annual Consumer Price Index adjustment.

How we calculated your 2020 indicative allocation for the Industry Training Fund

The information below details how your indicative allocations for Industry Training Fund Apprenticeships funding, and Industry Trainee funding were calculated.

Your previous years’ information was used to calculate 2020 indicative allocations.

We compared the value of your 2018 actual delivery (after offsets) with your 2019 allocation to determine the starting point for calculations.

If your 2018 actual delivery was below 100%, we used the lesser of either your:

  • 2018 actual delivery, or
  • 2019 allocation.

If your 2018 actual delivery was 100% or above, we used your:

  • 2019 allocation.

Note: Your 2018 actual delivery has been adjusted for any additional funding provided (including flexible funding), funding rate increases, and significant policy changes.  Your reviewed 2019 allocation includes plan changes and excludes one off adjustments.

The above methodology is applied separately to each of your Industry Training and Apprentice funding to determine your total indicative funding allocation.

Determining your final 2020 funding allocation

To determine your final 2020 allocation and Plan approval, we will also consider the following information in our assessment and/or engagements with you:

  • your delivery volumes reported in the Industry Training Register throughout 2019;
  • the application of any 2019 funding recoveries; and
  • your educational performance indicator data.

Funding rate

The funding rate (GST exclusive) for a single STM for New Zealand Apprenticeships and industry trainees is noted in the tables below:

2019 rates

Industry trainee $3,200.00 for training arranged by an ITO; or $2,880.00 for training arranged by a direct funding scheme organisation.
New Zealand Apprenticeship $5,200.00 for a New Zealand Apprenticeship arranged by an ITO; or $4,680.00 for a New Zealand Apprenticeship training arranged by a direct funding scheme organisation.

2020 rates

Industry trainee $3,258.00 for training arranged by an ITO; or $2,932.00 for training arranged by a direct funding scheme organisation.
New Zealand Apprenticeship $5,294.00 for a New Zealand Apprenticeship arranged by an ITO; or $4,764.00 for a New Zealand Apprenticeship training arranged by a direct funding scheme organisation.

Funding from the Industry Training Fund (ITF) is limited for each trainee and apprentice up to a maximum of 10 credits per month and 70 credits per year.

A trainee or apprentice may enrol in more than 70 credits of training in one year, but the additional credits will not be funded. See Condition: Limit on credits and Condition: Repayment for more information.

Direct funding scheme

Eligible organisations can access the Industry Training Fund (ITF) by participating in the direct funding scheme.

See Condition: Eligibility for ITF direct funding scheme for information.

An organisation funded through the direct funding scheme is exempt from submitting a proposed Investment Plan. Instead, it is funded as a TEO through a funding letter (off-Plan).

Funding calculation

Refer to ITF funding conditions including, but not limited to:

Funding from the ITF is limited for each learner up to a maximum of 10 credits per month and 75 credits per year.

A learner may enrol in more than 75 credits of training in one year, but the additional credits will not be funded.

See Condition: Limit on credits and Condition: Repayment.

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 learner is currently undertaking. RPL enables a learner to proceed with his or her training without repeating aspects of the programme previously studied, or re-learning skills the learner has already achieved through past work or other experience.

RPL for ITF learners

Learners may have already achieved some programme content prior to enrolment in an ITF-funded programme. The ITO must not claim funding where this is the case.

The ITO must recognise this prior learning and adjust the content in the learner’s programme. The ITO must not claim ITF funding for recognising this prior learning, or for arranging training where the learner already has this prior learning (i.e. skills and/or knowledge).

See Condition: Recognised prior learning

Payment

ITF funding is paid in monthly instalments. Each industry training organisation receives a schedule of proposed payments which outlines how funding is spread throughout the year.

The monthly payments are made on the second Wednesday of each month. This enables us to respond to changes in training volumes.

Other payments for industry training-related projects and participants in the direct funding scheme are milestone-based. These payments are also set out in the schedule.

Flexible funding

We fund the arrangement of training for New Zealand Apprenticeships above the amount the industry training organisation (ITO) has been approved to arrange. This is to provide ITOs with flexibility to meet additional apprenticeship demand.

See Condition: Flexible funding for New Zealand Apprenticeships.

Flexible funding for arranging additional apprenticeship training:

  • is payable for the arrangement of the type of apprenticeship training we have already agreed to fund
  • does not mean we have changed the organisation’s approved funding allocation, and
  • is subject to the conditions we have placed on the organisation’s funding (see Condition: Flexible funding for New Zealand Apprenticeships (insert link).

The external evaluation and review (EER) category referred to in Condition: Flexible funding for New Zealand Apprenticeships will be the highest published EER category for that ITO during the funding year to which flexible funding is being applied.

Flexible funding is calculated using information reported to the Industry Training Register, and after recoveries have been finalised. This means payment is made in April of the following year.

Note that the regular reports uploaded to Workspace 2 each month do not include flexible funding.

Claiming funding when a learner changes employer

If a learner transfers to a new employer and continues in their programme, the industry training organisation (ITO) may claim funding for any period between employers for up to six weeks. The learner must sign a new training agreement with the new employer within six weeks of leaving their previous employer. The ITO must keep records that confirm the change of employment occurred within six weeks.

Funding recoveries

How we will calculate any recoveries for 2018 Industry Training Fund funding

We will recover funding if you under-deliver in 2018

We will recover funding if you deliver less than 100% of your allocated Industry Training Fund funding. We will recover the difference between the value of actual delivery and 100% of allocated funding.

Recoveries are based on:

Your delivery volume data measured by STMs, submitted through the Industry Training Register (ITR), after we subtract the average-duration offset and the over-enrolment offset.

Average duration offset

We will recover where the actual average duration of a programme of training exceeds the nominal duration of a programme for all learners, measured by STMs, where this applies. We will recover funding to the extent of the over-duration, measured in STM.

Over-enrolment offset

We will recover funding where learners complete more than 75 credits in a calendar year in relation to any industry trainee or apprentice. We will recover funding to the extent of the over enrolment, measured in STM.

Under-achievement offset

Where an organisation has been arranging training for a full calendar year, we recover up to 5% of that organisation’s adjusted funding where less than 80% of an organisation’s learners funded for four or more months achieved fewer than 10 credits in the year.

Payments for flexible funding

If you meet the criteria for flexible funding and deliver over 100% of your apprenticeship allocation then we will pay for the over-delivery up to the greater of:

  • 102% of the approved allocation, or
  • 10 STMs

Note: As part of the eligibility criteria we will use your best NZQA External Evaluation and Review (EER) report during 2018.

Flexible funding is calculated over a calendar year using adjusted delivery and after any over-delivery transfer to under-delivered industry trainee funding.

Industry cash contribution

Industry training organisation (ITOs) are required to ensure that the employers of learners who are enrolled with them make a financial contribution towards the cost of training, except for training where the learner is eligible for fees-free.

See Condition: Financial contribution.

Non-TEC funding

Industry training organisations (ITOs) may seek or receive funds from the Government other than through us. These include the following:

  • Membership fees and grants from government departments and Crown agencies – when an ITO provides them with industry training services, such as standard setting and managing the delivery of industry training.
  • Fees received from government departments or Crown agencies and/or their employees in return for providing them with industry training services. These fees are similar to those received from private sector organisations and their employees for similar services.
  • Grants and fees from government departments and Crown agencies for services and resources that do not relate to:
    • meeting the costs of setting standards and maintaining associated quality management systems, and/or
    • managing training arrangements for the ITO’s learners, for which we are funding.
  • Moderation payments from the NZQA.

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 industry training organisation (ITO) 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 ITO has not complied, or is not complying, with a condition on which funding has been given under section 159YA of the Act, or
  • the ITO 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 an ITO has its funding approval revoked in accordance with section 159YG of the Act, the unspent portion of funding is repayable to the TEC (see Condition: Suspension, revocation or withdrawal of Industry Training Fund Funding). We may arrange to off-set the amount against any funding payable to the ITO.