The funding mechanisms for SAC levels 1 and 2 funding are issued by the Minister responsible for tertiary education. The funding mechanisms outline the general form and essential components of the fund. They provide the mandate for us to allocate the funding and what the funding can be used for, and details how we administer the funding.  

Funding is agreed to through a tertiary education organisation’s (TEO’s) Investment Plan (Plan). Refer to the Plan Guidance and Toolkit section of our website for information, products and templates for the 2018 investment round for 2019 funding.

A tertiary education organisation (TEO) that receives SAC levels 1 and 2 funding is required to:

• comply with the requirements of the Education and Training Act 2020, and
• comply with the conditions for SAC levels 1 and 2 funding, specified in in its funding approval documents.

Funding for SAC levels 1 and 2 is set through the Government’s annual budget process. We determine the appropriate amount of SAC levels 1 and 2 funding for a TEO.

SAC levels 1 and 2 is funded using the equivalent full-time student (EFTS) funding model. One EFTS means the student workload 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.

See Condition: Use of SAC1&2 Fund Funding.

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
• volume of delivery expected for,

each qualification.

SAC levels 1 and 2 funding is paid in equal monthly instalments from January to June, and in equal monthly instalments from July to December.

Indicative allocation

The indicative allocation is our early estimate of the “On-Plan” funding that each tertiary education organisation (TEO) could receive in the following delivery year if its Investment Plan is approved for funding.

We calculate the indicative allocation using a set of allocation methodologies. These methodologies are specific to each fund. We review and revise them every year to ensure they’re aligned to funding determinations and the current tertiary environment.

Indicative allocations are made available through the My Allocations and Payments app on Ngā Kete from 1 June.

For more information, see Indicative allocations by year.

For more details regarding your specific allocation, please contact customerservice@tec.govt.nz or your Relationship Manager.

These rates include a general 2.75% increase to funding for 2023.

2023 funding rates per EFTS:

^{All rates exclude GST}

* The Supported Learning rate is only applicable for learners enrolled in the New Zealand Certificate in Skills for Living for Supported Learners (Level 1).

2022 funding rates per EFTS:

^{All rates exclude GST}

* The Supported Learning rate is only applicable for learners enrolled in the New Zealand Certificate in Skills for Living for Supported Learners (Level 1).

Refer to SAC levels 1 and 2 funding conditions including, but not limited to the following.

• Condition: Valid domestic enrolments 
• Condition: Claiming SAC1&2 funding

We calculate a tertiary education organisation’s (TEO’s) consumed funding using:

• the number of valid domestic student enrolments, measured by equivalent full-time students (EFTS), and
• the qualifications, and their component courses, in which a valid domestic student is enrolled.

Non-competitive funding

Determining the funding rate for the qualification

Each qualification or training scheme that we agree to fund through SAC levels 1 and 2 non-competitively allocated funding must be categorised according to the table below.

The funding category is derived from the course funding codes (alphabetic and numeric codes). Course funding codes, and the funding rate for each qualification/training scheme funding category, are set out in the table below.

2019

The funding rates below are effective from 1 January 2019.

2018

The funding rates below are effective from 1 January to 31 December 2018.

See the Information on courses  section of Qualifications and courses for:

• Course classification (CLASS) – how to classify courses.
• Funding category (CATEGORY) – how to determine course funding code from course classification. Note: ‘Course code’ is the same as course ‘funding category’ but, in this instance, no funding rate applies to the category.

The course funding code relevant to the majority (more than 50%) of a qualification/training scheme’s course credits in STEO determines which qualification/training scheme funding category will apply (and therefore which funding rate will apply to the qualification or training scheme).

For example, if more than 50% of approved STEO course credits leading to award of a qualification (or training scheme) are trades credits, then all provision leading to the award of that qualification will be funded at the rate of $13,000 per EFTS.

Calculating funding consumed

To calculate a TEO’s consumed SAC levels 1 and 2 non-competitively allocated funding, we use the following elements:

• the metric (EFTS value)
• qualification or training scheme classification
• classification funding rates, and 
• student enrolments. 

Example

2018 Competitive funding

Determining the funding rate for the qualification

As part of the competitive process, TEC and the TEO concerned agreed a funding rate for providing each approved qualification. 

Calculating funding consumed

To calculate a TEO’s consumed SAC levels 1 and 2 competitively allocated funding, we use the price per EFTS of each qualification, and student enrolments.  

Example

Performance-linked funding

A performance-linked funding (PLF) element is applied to SAC levels 1 and 2 funding. See Condition: Performance-linked funding for SAC levels 1 and 2 funding.

Recognition of learning / prior achievement

Recognition of learning / prior achievement refers to previous study or experience (prior achievement) relevant to the programme the student is about to enrol in or is currently studying. It 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.

Recognition of prior learning (RPL), and credit recognition and transfer (CRT), are forms of recognising learning / prior achievement. The New Zealand Qualifications Authority (NZQA) provides information and guidelines on recognition of learning / prior achievement for tertiary education organisations (TEOs).

RPL and CRT for SAC levels 1 and 2 students

Students may already have some knowledge of, or achieved, some courses or course content prior to enrolment in a SAC levels 1 and 2 funded qualification. The TEO must not claim funding where this is the case.

The TEO must recognise this prior learning and adjust the courses in the learner’s programme. The TEO must not claim SAC levels 1 and 2 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: Recognised prior learning.

We also expect the TEO to similarly adjust the student’s compulsory student services fee (CSSF) (if applicable) in light of the student’s prior learning. That is, the TEO should see RPL and CRT as a function of the TEO’s compliance with Condition: Recognised prior learning. See Fees on the Enrolment page.

The TEO is expected to be proactive about engaging with learners at the point of enrolment to determine whether they are likely to have existing knowledge, skills, and attributes that can contribute to the graduate outcomes of the qualification.

If the student has achieved course content previously, the TEO must work out the EFTS factor of prior learning of the student (relative to the standard course). 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.

Re-enrolling a SAC levels 1 and 2 student

Where a SAC levels 1 and 2 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.  See Condition: Exceeding the total annual EFTS value of the qualification.

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.

We approve SAC levels 1 and 2 funding as a total dollar value (not an EFTS volume). A tertiary education organisation (TEO) is expected to manage its enrolments effectively and in accordance with its Investment Plan (Plan). 

We will consider the level of delivery achieved when determining future funding allocations.

Under-delivery

For SAC levels 1 and 2 funding, we have a tolerance band for under-delivery, which is currently set at 99% of each year’s funding. This is to acknowledge that the dollar value of enrolments may vary from the dollar value of the allocation approved by us.

If a TEO delivers less than 99% of its SAC levels 1 and 2 funded provision during the year, we will recover funding (see below for recovery details). We may also reduce SAC levels 1 and 2 funding to the level of actual delivery within the Investment Plan period by making a significant Plan amendment, or by revoking or suspending some funding.

Over-delivery

We will only pay SAC levels 1 and 2 funding up to the dollar amount agreed in the TEO’s funding approval letter. This means that we will not pay for over-delivery.

The methodology and technical specifications for the calculation of 2022 funding wash-ups can be found in the 2022 Global Wash-up Methodology document.

2022 Global Wash-up Methodology (PDF 1.1 MB)

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 tertiary education organisation (TEO) has not achieved, or is not achieving an outcome anticipated in its Plan for a tertiary education programme or activity in relation to which funding has been given under section 425 of the Act
• the TEO has not complied, or is not complying, with a condition on which funding has been given under section 425 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 425 of the Act.   

If a TEO has its funding approval revoked in accordance with Schedule 18 Clause 16 of the Act, the unspent portion of funding is repayable to us (see Condition: Suspension,revocation or withdrawal of SAC1&2 Fund Funding). We may arrange to off-set the amount against any funding payable to the TEO.