Funding and payments

Funding and payments

Last updated 15 March 2019
Last updated 15 March 2019

How Student Achievement Component (SAC) levels 1 and 2 funding is set and payments are made. Also includes funding allocation, funding for additional delivery, funding calculation, and funding recovery information.

Funding

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 Investment Toolkit sections 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 Act 1989, and
  • comply with the conditions for competitively allocated SAC levels 1 and 2 funding, and/or the conditions for non-competitively allocated 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 (Competitive) Fund Funding for competitively allocated SAC levels 1 and 2 funding, and Condition: Use of SAC1&2 (Non-competitive) Fund Funding for non-competitively allocated SAC levels 1 and 2 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.

Payments

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 (subject to Performance-linked funding  adjustment).

Funding allocation

How we determined the indicative allocations for SAC levels 1 and 2 2019

The purpose of SAC levels 1 and 2 funding 

SAC levels 1 and 2 funding contributes to the provision of teaching and learning services for enrolled students at tertiary education organisations (TEOs). The objectives of this fund are to:

  • provide people who do not already have essential foundation skills with access to a low cost way to gain those skills
  • provide progression to higher level study and skilled employment
  • build the literacy and numeracy skills of eligible students
  • enable students to learn English or Te Reo Māori
  • encourage TEOs that are best able to meet the needs of foundation education students.

Special Supplementary Grant (SSG) funding is to fund additional tutor support for special education in TEOs.

How we calculated your 2019 indicative allocations for SAC levels 1 and 2

Your prior performance information was used to calculate your 2019 indicative allocation.

We applied the new funding rates for 2019 to indicative allocations (see below for funding rates).

Funding rates were increased for 2019, which resulted in an increase to indicative allocations.  

Currently funded TEOs

TEOs that are currently funded for SAC levels 1 and 2 (either for competitive or non-competitive funding) have received an indicative allocation calculated as follows:

To determine the starting point for calculating your 2019 indicative allocation we compared your 2017 actual SAC levels 1 and 2 delivery with your 2018 allocation.

If your 2017 actual delivery was below 100%, we used the lesser of either your:

  • 2017 actual delivery, or
  • 2018 allocation.

If your 2017 actual delivery was 100% or above, we used your:

  • 2018 allocation.

Note: Plan increases in the first half of 2018 (excluding one-off increases) were added to your 2017 actual delivery to determine your 2019 indicative allocation. Any Plan reductions in 2018 were excluded to avoid double reductions.

Once we established your starting point we then considered your SAC levels 1 and 2 2017 course completions

If your 2017 course completions were less than 50% we applied a 50% reduction to your 2019 indicative allocation. This was calculated at the TEO level.

Negotiating your final 2019 funding allocation

To determine your final 2019 allocation and Plan approval, we considered the following information in our engagements with you:

  • your Educational Performance Indicator data,
  • the Literacy and Numeracy for Adults Assessment Tool (LNAAT) information, and
  • any ring-fenced reduction to funding

We considered requests for funding increases following the submission of draft Plans or, if you are Plan-exempt, your applications for funding. Additional funding was only considered for high-performing TEOs who requested it, and where funding was available.

New or returning TEOs seeking funding for 2019

Where SAC levels 1 and 2 funding was available following the initial allocation process, we sought interested from TEOs not currently funded for this delivery.

If you delivered SAC levels 1 and 2 for the first time in either 2017 or 2018, we used:

  • your 2018 allocation.

Allocations for Special Supplementary Grant funding remains the same as per previous years. 

Funding rates for all SAC levels 1 and 2 provision for 2019

The funding rates per EFTS are:

Category Funding rate
Te Reo Māori $7,500
English for Speakers of Other Languages  $8,000
Supported Learning $13,000
Trades $13,000
Services $9,000
General foundation education $8,500

All rates exclude GST

Funding recoveries

How we will calculate your recovery for 2018 SAC levels 1 and 2 funding (competitive)

We will recover funding if you under-deliver in 2018

We will recover if you deliver less than 99% of your allocated SAC levels 1 and 2 competitive funding.

We will recover the difference between the value of actual delivery and 99% of allocated SAC levels 1 and 2 funding. 

Recoveries are based on:

  • your delivery volume data (at the qualification level), submitted through the December SDR. 

Early withdrawal of enrolments

We will calculate the dollar value of actual delivery for students who have not completed 10% or one month of the SAC levels 1 and 2 course for which they have enrolled, whichever is the earlier.

This amount will be deducted from the total value of delivery. 

How we will calculate your recovery for 2018 SAC levels 1 and 2 funding (non-competitive)

We will recover funding if you under-deliver in 2018

We will recover if you deliver less than 99% of your allocated SAC levels 1 and 2 non-competitive funding.

We will recover the difference between the value of actual delivery and 99% of allocated SAC levels 1 and 2 non-competitive funding.

Recoveries are based on:

  • your delivery volume data (at the qualification level), submitted through the December SDR.

We will apply the applicable rate as per the table below. 

SAC Level 1-2 non-competitive classification of qualifications and training schemes  Funding rate/EFTS
Te Reo Māori  $6,500
English for Speakers of Other Languages $7,000
Supported Learning $12,000
Trades $13,000
Services $9,000
General foundation education $7,500

All rates are GST exclusive 

Early withdrawal of enrolments

We will calculate the dollar value of actual delivery for students who have not completed 10% or one month of the SAC levels 1 and 2 non-competitive course for which they have enrolled, whichever is the earlier.

This amount will be deducted from the total value of delivery. 

Calculating funding

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

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.

Funding calculation

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.

Course funding code (alphabetic and numeric codes) Funding categories for SAC levels 1 and 2 non-competitive funded qualifications and training schemes Funding rate/EFTS
A1 Te Reo Māori $7,500
A1 English for Speakers of Other Languages $8,000
A1 (there may be others) Supported Learning $13,000
A1, B1, C1, J1, L1, P1 Trades $13,000
A1, B1, C1, J1 Services $9,000
A1 General foundation education $8,500
2018

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

Course funding code (alphabetic and numeric codes Funding categories for SAC levels 1 and 2 non-competitive funded qualifications and training schemes Funding rate/EFTS
A1 Te Reo Māori $6,500
A1 English for Speakers of Other Languages $7,000
A1 (there may be others) Supported Learning $12,000
A1, B1, C1, J1, L1, P1 Trades $13,000
A1, B1, C1, J1 Services $9,000
A1 General foundation education $7,500

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

Step Funding calculation  Example
1 Assign the qualification or training scheme an EFTS value A TEO’s Certificate in Trades obtained through one full-time academic year’s study has a value of 0.5 EFTS.
2

Disaggregate the qualification into courses

Calculate the EFTS factor of each course

It comprises four courses.

The EFTS value of the qualification is disaggregated among the four courses. For this example, each course has an EFTS factor of 0.125 EFTS.
3 Assign the appropriate course classification (CC) and course funding code to each course

One course is 03-General Education – A1;

Three are 22-Trades – P1.
4 TEC assigns the qualification or training scheme a funding category The Certificate in Trades is categorised as a Trades qualification.
4 TEC applies the funding rate (price per EFTS) for the qualification or training scheme classification to each course The funding rate for this Trades qualification is $13,000 per EFTS.
5 Multiply the funding rate by the number of valid enrolments

Forty students enrol in the four courses in the qualification.  The value of delivery in this qualification is $260,000 (excl. GST).

ie, 0.5 x $13,000 x 40

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

Step Funding calculation  Example
1 Assign the qualification an EFTS value A TEO’s Certificate in Trades obtained through one full-time academic year’s study has a value of 0.5 EFTS.
2 Apply the funding rate (price per EFTS) The TEO has specified the funding rate for this qualification as $7,500 per EFTS, for 20 EFTS of provision.
3 Multiply the funding rate by the number of valid enrolments

Forty students enrol in the qualification.  The qualification attracts $150,000 in SAC level 1 and 2 funding (excl. GST).

ie, 0.5 x $7,500 x 40

Performance-linked funding

A performance-linked funding (PLF) element is applied to SAC levels 1 and 2 funding. See Condition: Performance-linked funding for competitively allocated SAC levels 1 and 2 funding, and Condition: Performance-linked funding for non-competitively allocated 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 for competitively allocated SAC levels 1 and 2 funding, and Condition: Recognised prior learning  for non-competitively allocated SAC levels 1 and 2 funding.

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 competitively allocated SAC levels 1 and 2 funding, and Condition: Exceeding the total annual EFTS value of the qualification for non-competitively allocated SAC levels 1 and 2 funding.

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.

SAC levels 1 and 2 over-delivery and under-delivery

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.

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 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 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 us (see Condition: Suspension or revocation of SAC1&2 (Competitive) Fund Funding -insert link and Condition: Suspension or revocation of SAC1&2 (Non-competitive) Fund Funding - insert link). We may arrange to off-set the amount against any funding payable to the TEO.