Funding and payments
Funding and payments
How Industry Training Fund (ITF) funding is set, allocated, calculated, and recovered.
How Industry Training Fund (ITF) funding is set, allocated, calculated, and recovered.
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:
- comply with the requirements of the Education and Training Act 2020, and
- comply with the conditions specified in its funding approval documents.
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.
Our approach to calculating your 2021 indicative allocation for the Industry Training Fund
This document provides the specifications for the 2021 Industry Training Fund allocation methodology.
The purpose of Industry Training Fund
The Industry Training Fund subsidises 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.
How we calculated your 2021 indicative allocation for the Industry Training Fund
This is a summary of how your indicative allocation was calculated. For more details regarding your specific allocation, please contact firstname.lastname@example.org or your Relationship Manager.
We considered, and may have made manual adjustments for, your educational performance indicators, and anticipated declines in enrolments in low priority areas due to Covid-19.
To determine the starting point for calculating your 2021 indicative allocation we compared your 2019 actual Industry Training Fund delivery with your 2020 allocation.
Note: Your 2019 actual delivery has been adjusted for any additional funding provided (including flexible funding), funding rate increases, and significant policy changes. Your reviewed 2020 allocation includes plan changes and excludes one off adjustments. We make these adjustments to ensure we are accurately comparing your 2019 actual delivery with your 2020 allocation, in dollar terms.
If your 2019 actual delivery was below 100%, we used the lesser of either your:
- 2019 actual delivery, or
- 2020 allocation
If your 2019 actual delivery was 100% or above, we used your:
- 2020 allocation
If you delivered Industry Training Fund for the first time in either 2019 or 2020, we used your:
- 2020 allocation.
Once we established your starting position we included any 2021 funding rate increases.
How we calculated your 2021 indicative allocation for transitional or new TEOs during the Reform of Vocational Education:
Funding allocations for Transitional Industry Training Organisations (TITOs) that have allocations in relation to delivery previously undertaken by the TITO's predecessor ITO, will be calculated based on the prior funding and performance of the predecessor ITO.
If the function of arranging training is transferred from a TITO to the New Zealand Institute of Skills and Technology (NZIST), a wānanga, or a Private Training Establishment (PTE), funding allocations will be calculated based on the prior funding and performance of the TITO.
Determining your final 2021 funding allocation
To determine your final 2021 allocation and Plan approval, we will consider the following information in our assessment and/or engagements with you:
- your delivery volumes reported in the Industry Training Register throughout 2020;
- the application of any 2020 funding recoveries; and
- your educational performance indicator data.
Key changes to our approach for 2021
Previously the starting point was calculated using actual delivery and was not adjusted based on whether delivery was below or at 100%. Further plan increases or in-year adjustments were not accounted for.
We will now take into account if delivery volume was at or below 100% and any in-year plan adjustments where necessary.
The funding rate (GST exclusive) for a single STM for New Zealand Apprenticeships and industry trainees is noted in the tables below:
These rates include a general 1.2% increase plus 5% Vocational Education and Training (VET) compounding to funding for 2022.
|Industry trainee||$3,310.00 for training arranged by an ITO; or $2,979.00 for training arranged by a direct funding scheme organisation.|
|New Zealand Apprenticeship||$5,379.00 for a New Zealand Apprenticeship arranged by an ITO; or $4,840.00 for a New Zealand Apprenticeship training arranged by a direct funding scheme organisation.|
$3,517.00 for training arranged by an ITO; or $3,165.00 for training arranged by a direct funding scheme organisation.
New Zealand Apprenticeship
$5,716.00 for a New Zealand Apprenticeship arranged by an ITO; or $5,143.00 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 75 credits per year.
A trainee or apprentice 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 for more information.
2020 Industry Training Fund Recovery Methodology
We will write off and not be recovering any under-delivery of 2020 Industry Training Fund (ITF) funding approved prior to 1 April 2020 from Tertiary Education Organisations (TEOs).
Additional Funding approved since 1 April 2020 will be recovered if there is under-delivery.
Recoveries and write offs are based on:
- a TEO’s most recent actual 2020 delivery data measured by Standard Training Measures (STMs), submitted through the Industry Training Register (ITR), as at the date the data is captured (31 March 2021).
- actual delivery is calculated using the applicable 2020 ITF funding rates
How we will calculate any Recovery of Additional Funding
We will recover under-delivered Additional Funding approved since 1 April 2020, at the fund level.
- We will recover the difference between the dollar value of Actual Delivery, less condition off-sets, and 100% of allocated funding.
- The Recovery will not exceed the amount of Additional Funding approved.
How we will calculate any Recovery, for write off purposes
- We will write off the difference between the dollar value of actual delivery, less condition off-sets, and approved allocated funding, that exceeds the value of Additional Funding approved since 1 April 2020.
When calculating the Recovery, we adjust the dollar value of your delivery based on condition off-set factors, noted below:
- Under-achievement off-set – relates to the number of credits a learner achieves during the period;
- Average duration – relates to determining how long a programme should be; and
- Over-enrolment off-set - applies when the total credits we fund for an industry training learner exceed 10 credits per month and/or 75 credits per year.
Covid 19 impact on condition off-sets
In 2020, due to the impacts of COVID-19:
- the Under-achievement and Average Duration off-sets will be excluded when determining your actual dollar value of delivery, and
- a TEO may be exempt from the Over-enrolment off-set, if it is able to demonstrate to the TEC, the number of trainees enrolling in multiple training programmes has occurred as a result of COVID-19.
We are currently finalising the process for applying for an exemption of the over-enrolment off-set, and will provide additional information to you when this has been determined.
Flexible funding calculation for New Zealand Apprenticeships (NZAs)
If you meet the criteria for flexible funding and the TEO’s delivery, less condition off-sets, is over 100% of your approved apprenticeship allocation we will pay the greater of:
- up to 102% of the approved allocation, or
- the dollar value of 10 STMs for NZAs.
Flexible funding is calculated over a calendar year using adjusted delivery and after any over-delivery of apprenticeship funding transfer to under-delivered industry trainee funding.
Flexible funding eligibility criteria
- have a NZQA External Evaluation and Review (EER) rating of Category 1 or 2. We will use the highest EER published report during 2020;
- achieve a credit achievement rate of 70% or higher in the calendar year.
Refer to ITF funding conditions including, but not limited to:
- Condition: Learner eligibility
- Condition: Programme eligibility
- Condition: Recognised prior learning
- Condition: Subcontracting
- Condition: Limit on credits
- Condition: Repayment.
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.
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).
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.
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.
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.
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.
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 Schedule 18 Clause 16 of the Education and Training Act 2020 (the Act), we may suspend or revoke some or all funding given under section 425 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 425 of the Act
- the organisation has not complied, or is not complying, with a condition on which funding has been given under section 425 of the Act, or
- the organisation has not provided, or is not providing, adequate and timely information required by the TEC or Ministry of Education under section 425 of the Act.
If an ITO has its funding approval revoked in accordance with Schedule 18 Clause 16 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 organisation.