Consequences for delivery over 105% of DQ3-7 and DQ7+ funding
Consequences for delivery over 105% of DQ3-7 and DQ7+ funding
We have set out the consequences for providers that deliver over 105% of their allocated DQ3-7 and DQ7+ funding. This ensures that our expectations and the consequences for providers in the event of over-delivery are transparent and consistent.
We have set out the consequences for providers that deliver over 105% of their allocated DQ3-7 and DQ7+ funding. This ensures that our expectations and the consequences for providers in the event of over-delivery are transparent and consistent.
What is over-delivery?
Over-delivery refers to any delivery over 100% of a TEO’s DQ3-7 (Delivery at Levels 3–7 (non-degree) and DQ7+ (Delivery at Levels 7+ (degree) on the New Zealand Qualifications and Credentials Framework (NZQCF) allocation.
In 2013, Cabinet set the delivery tolerance bands for delivery at levels 3 and above on the NZQCF at 99-105%. These bands provide flexibility within an approved range. TEOs can over- or under-deliver within this range without consequences. The bands are based on the DQ3-7 and DQ7+ dollar value, not EFTS volumes.
Even though over-delivery does not automatically attract TEC funding (beyond the relevant Flexible Funding threshold for eligible TEOs), delivery over 105% is a concern as it imposes costs on the Crown through student loans and allowances. In addition, over-delivery risks the quality and financial sustainability of education.
Delivery above the 105% threshold is calculated using the TEO’s combined:
- approved allocation, and
- dollar value of its Plan-agreed unfunded provision (if any).
What over-delivery is allowed?
The tolerance bands allow for over-delivery up to 105%[1] of the DQ3-7 and DQ7+ allocation. This includes Flexible Funding for eligible TEOs of up to 102%. There are no direct penalties for over-delivery up to 105%, but all delivery is subject to ongoing performance and prioritisation conversations with TEC.
It is a condition of funding for TEOs not to deliver over 105% of their dollar value allocation.
[1] This includes Flexible Funding delivery of up to 102% or 10 EFTS (whichever is larger) for eligible TEOs. Flexible Funding means that TEOs are funded for delivery up to 102%, provided they meet the Flexible Funding requirements. For some small PTEs, 10 EFTS of Flexible Funding is greater than 105%. In these instances, the TEO would not be penalised by TEC.
What do TEOs need to do?
You need to monitor your provision and get in touch with your Relationship Manager or Relationship Advisor as soon as you can if you believe you may be trending to over-delivery, and give us a plan of how you will address this.
What are the consequences of unapproved delivery over 105%?
In our 2025 Plan Guidance, we advised we would use past delivery, including under- and over-delivery, as part of our assessment against your Plan.
In terms of direct consequences, our response to unapproved over-delivery will be proportionate to the circumstances of each case to ensure that we are flexible and take a measured approach. Factors, such as the extent of the over-delivery and its frequency, would be taken into account.
We will contact you if interim data shows that you are trending towards over-delivery so that you can make the necessary adjustments for the remainder of the year to bring delivery within the allowable threshold.
The table below represents the range of actions we may take if a TEO delivers over 105% of its DQ3-7 and DQ7+ allocation.
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In the event of: |
TEC will… |
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Over-delivery being confirmed for TEOs funded less than $5m: More than 105% but less than 110% |
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Over-delivery being confirmed for TEOs funded less than $5m: More than 110%
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Over-delivery being confirmed for TEOs funded $5m or more: Any delivery more than 105% |
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If you have any questions regarding over-delivery please contact us at customerservice@tec.govt.nz.