What are the new funding rates?

Under the unified funding system, the Government has released funding rates for providers seeking funding for levels 3-7 (non-degree) and all funding (at all levels) previously delivered by the Industry Training Fund.  

For more information about the rates, please see UFS 2023 funding rates section of our website.

Does the UFS affect TEOs that only deliver provision at foundation level?

TEOs that are funded to deliver provision at foundation level, e.g. DQ1-2 / Youth Guarantee / Adult Community Education / Intensive Literacy and Numeracy Fund, or who do not currently deliver VET provision, will see no changes.  The UFS only applies to VET provision formerly allocated through SAC3+ (Levels 3-7 non-degree) and the Industry Training Fund (at all levels) now referred to as DQ3-7. 

What is an EFTL?

EFTL stands for ‘equivalent full-time learner’ and is equal to 1 STM or 1 EFTS.

The equivalent full-time measure relates to a year, or 12-month period. The credit value relates to the standard of one-year full-time study generally being 120 credits.

Where does Youth Guarantee fit under the UFS?

Youth Guarantee is not part of the UFS.

Will PTEs have to re submit an Investment Plan if they are mid-cycle?

Only plan-required TEOs will be required to submit an Investment Plan. Further detailed guidance on Plan requirements is provided in Plan Guidance

How have the indicative funding allocations been calculated?

You can find information here on the 2023 Global Indicative Allocation methodologies.

How is aviation funding calculated under the UFS?

Any caps for funding for aviation provision will be confirmed once the funding mechanism has been agreed to by the Minister of Education.

Why are the trades funded lower than engineering when there is considerable capital investment in trades training?

The Ministry of Education and the Tertiary Education Commission considered benchmarking data, international comparisons and other information gathered from the sector to develop advice on the relative costs of providers delivering vocational education and training (VET) by mode and subject. This includes the cost to deliver as well as fund in trades and engineering.

Where does English as a Second Language (ESOL) learning fit under the UFS?

Level 3-7 ESOL will fall into provider based F1 category.

Is the 10% of transitions funding based on EFTS/EFTL and not include any ITF funding received by a receiving TEO?

The TEC looks at overall UFS funding being received. Some providers do not receive work-based learning or other sources of funding, so we will consider all UFS funding.

All PTEs can apply for strategic component funding.

What is the impact on PTEs that deliver non-UFS funding?

There is no change to PTEs who are not included in the UFS.

Do level 7 micro-credentials fall under UFS? 

Yes, level 7 micro credentials do fall under the UFS. Micro-credentials are not eligible for funding under the Work-based: pathway to work mode of delivery.

Is TEC and NZQA working together so that the new UFS works with Programme approval rules/requirements?

Yes, we are working together and will continue to do so as we implement the new system. 

How has funding for vocational education changed under the UFS? 

The funding rates for the UFS for vocational education incorporate the $279.5 million announced for VET in Budget 2021 and the 2.75% rates increase announced at Budget 2022.

The average funding rate to support people in work-based training will increase by approximately 50 per cent in 2023 from $4,900 per fulltime equivalent learner to $7,400 when compared to 2021 rates. Funding targeted to support learners will increase more than sevenfold.

How do I know what mode my provision is?

You should determine this using the definitions provided. TEC will provide further information on mode operational definitions following sector consultation when funding rates for the delivery component are confirmed in April 2022.

I’m a learner. How do I know what mode I am learning in and what should I expect from it?

In future, the new modes mean that you should have more options available to you about where you study. For those based at a provider, your provider should be able to support you to continue your training in a work-based setting, if this is right for you. You should see no change to the qualification you are enrolled in or the support you receive. The information you received on enrolment should tell you what to expect from your programme of study. There may be additional support available to you over time. Your provider will let you know about these changes.

I’m an employer. Does this mean the training that my employees receive will change?

We expect the new modes of delivery will deliver many positive changes to the way providers support employers and learners. You should continue to work with the provider of your training to agree the best learning opportunities for you and your staff.

Why do you want to fund mode and subject?

We want to reflect more closely the cost of delivery. Stakeholders have told us that costs vary depending on the subject and by how and where learning is delivered. Funding by modes and subject allows learners, employers and providers to make choices that are best for them. Providers will receive funding that more closely matches the cost of the delivery.

I’m an employer. Do I need to do anything differently?

No. You should work with the provider of your training to agree the best learning opportunities for you and your staff.

What are performance element incentive payments? When will they be implemented?

The learner component has an incentive payment element which will be paid to each TEO on achieving the performance expectations set by TEC. This will be part of TEOs’ annual investment plan process within TEOs’ learner success plan, where appropriate.

TEC is taking a phased approach to implementing these incentive payments. In 2023, this payment will be required of a small number of TEOs (but those with significant levels of learner component funding), then rolling out to cover all TEOs in 2024.  

For more information, please see the Learner Component section of our website.

How do TEOs apply for learner component funding?

TEOs will not need to apply for learner component funding. It will be allocated as part of TEOs’ overall funding for VET.

Can PTEs apply for more transitions funding?  How do they do this?

No. TEC will allocate transition funding to eligible TEOs based on the published criteria and allocation methodology.

There are no additional reporting requirements.

What is the definition of ‘low prior achievement’ (LPA)?

In 2022, this is a learner under the age of 25 as at the date of enrolment who has not previously achieved a qualification on the NZQF at level 3 or above.

From 2023, it will apply to all learners as at the date of enrolment who has not previously achieved a qualification on the NZQF at level 3 or above, not just those under 25.

How are learners with LPA identified by the TEC?

SDR, ITR and NZQA data are used to determine LPA.  If prior education records are not available for a learner, they are deemed to be LPA.

Does the LPA include equivalent qualifications achieved overseas?

Where overseas qualifications are recorded in the data, they are taken into account in the LPA analysis.

Will a student out of high school into tertiary education be considered someone with LPA?

Students that have not achieved NCEA level 3 are considered having LPA.

Will a PTE lose their learner component funding if an LPA learner achieves at level 3 and transitions to a level 4 course, unless the student qualifies under a different component?

The learner attributes are proxies for distributing funding. The learner component is not intended to be targeted at specific learners with these characteristics – the funding is a contribution for the support of all learners.  It is expected that each TEO will determine the actual support each learner requires, whether or not the learner has any of the characteristics used for the funding proxy.

Can learner component funding be recovered through the wash-up process?

No, there are no recoveries of the learner component.

Can a TEO update the Disability Status and Disability Support Needs fields after enrolment?

Yes, if a learner’s disability status has changed since their enrolment, and the TEO has also obtained the learner’s answers to the Disability Support Needs questions, TEOs can amend the record in the next learner file submission.

How were the four learner groups that are linked to the learner component chosen?

We undertook extensive analysis of data on the performance of the Vocational Education and Training (VET)  system to understand more about those learners who, on average, have been not well served by the education system in the past. This analysis showed that there were four groups of learners most at risk of not completing VET qualifications and/or face a range of disadvantages in the VET system: learners with low prior achievement, disabled learners, Māori learners and Pacific learners.

Why are only four learner groups linked to funding?

Accurately identifying each individual learner's needs is challenging. We needed a way to approximate the level of need among each TEO's learner population. We did this by using relatively large learner groups that are more likely to face disadvantages in the VET system. Our analysis shows that these four groups of learners are good proxies of need among each TEO's learner population, that is, they approximate the level of need in a straightforward way.

What about learners who don’t fall into the four groups linked to funding? How will they get support?

TEOs should use learner component funding for all learners who need additional support, not just for learners in the four identified groups. The four groups serve as a proxy for learners who need additional support to be successful in VET. Providers are expected to identify the unique needs of all their learners (including through engagement with learners and their communities), decide how best to support them, and allocate funding accordingly. All learners should therefore receive the support they need to be successful in VET.

Why is there a difference in rates for Māori and Pacific learners compared to learners with low prior achievement and disabled learners?

Data is mixed on how the system performs for Māori and Pacific learners. For example, while Māori learners are more likely than New Zealand European learners to participate in VET, they experience poorer employment outcomes from their study. This means that tying funding to a participation measure alone is unlikely to have the results we want to see. We have therefore developed a performance incentive payment that can more directly incentivise the outcomes we want. Māori will be involved in developing the indicators for this.

Importantly, for Māori and Pacific learners who also have low prior achievement and/or are disabled, providers will receive both funding rates. Māori and Pacific learners who have low prior achievement and/or are disabled will attract the highest level of funding. It recognises that these learners have compounding levels of disadvantage.

Will the incentive payments be the same as the previous performance-linked funding?

No. We are still developing the details of how they will work but they are not intended to be the same as performance-linked funding. Further information will be available in 2022.

How will performance expectations for each TEO be set?

We are still developing the details of how these will be set along with related incentive payments. We will work with stakeholders to finalise the details of the performance part of the learner component. Further information will be available in 2022.

What happens to existing equity funding for VET?

The learner component replaces equity funding for VET. From 2023, equity funding will not apply to VET but will continue for non-UFS provision.

Why doesn’t the learner component apply to the assessment and verification mode?

The assessment and verification mode will support learners who are employed and receive support for their learning and wellbeing directly from their employer. Providers will have a limited role focused on quality assurance of the assessment that underpins learners’ qualifications. This means providers will have little direct contact with learners and limited scope to engage with and support learners.

How will the funding be calculated with learners with more than one eligible characteristic?

We will calculate funding by allocating:

• the relevant rate where a learner is identified in the data as disabled and/or having low prior achievement
• the relevant rate where a learner is identified in the data as Māori and/or Pacific
• both relevant rates where a learner is identified in the data as disabled and/or having low prior achievement and as Māori and/or Pacific (both rates apply).

How are learners with low prior achievement identified?

Learners with low prior achievement are those who have not achieved a prior qualification at level 3 or above on the New Zealand Qualifications Framework (NZQF) as at the learner’s enrolment start date.

How will support for learners change?

Over time, all VET learners can expect learning and wellbeing support that is tailored to their specific needs. This will take time but we expect providers to more proactively identify learners who may need support and for providers to be more focused on meeting learners’ needs.

Who receives the funding? And who decides how it is spent?

Learner component funding will be allocated to TEOs. They will decide how to spend this funding in a way that supports all of their learners' needs.

How will this improve the way the VET system performs for Māori learners?

Māori learners can expect to have increased opportunities to enrol in and complete VET qualifications that have strong employment outcomes including apprenticeships. Providers and employers will be encouraged to work together to increase hiring, training and support for Māori learners. Labour market underutilisation rates could drop, and median salaries could rise. Māori learners will be able to consistently expect culturally affirming learning environments.

How will this improve the way the VET system performs for Pacific learners?

As for Māori, Pacific learners can expect to have increased opportunities to enrol in and complete VET qualifications that have strong employment outcomes, including apprenticeships. Providers and employers will be encouraged to work together to increase hiring, training and support for Pacific learners. Labour market underutilisation rates could drop, and median salaries could rise. Pacific learners will be able to consistently expect culturally affirming learning environments

How will this improve the way the VET system performs for disabled learners?

Providers will have increased capability and capacity to understand, identify and support disabled learners’ needs. Providers and employers will be encouraged to work together to improve hiring and training rates and support for disabled employees. Disabled learners could increasingly enrol in, and complete, VET qualifications that have strong employment outcomes, including work-based training. The very high labour market underutilisation rates for disabled people could drop.

How will this improve the way the VET system performs for learners with low prior achievement?

Learners with low prior educational achievement can expect more support to complete their qualifications. We are seeking a significant improvement in qualification completion rates for these learners compared to other learner groups.

How are disabled learners identified?

Disabled learners are learners who identify as disabled on enrolment forms and learners who access disability support from providers. TEC is working with providers and the wider sector to improve data collection on disabled learners.

How will Wānanga receive funding under the strategic component?

Wānanga will be eligible to receive Programme Development and Maintenance Fund (PDMF) funding via their on-Plan investment process.

Officials are also working with the Wānanga through a separate workstream on funding to recognise their unique role in, and contribution to, the VET sector. 

Why doesn’t Te Pūkenga have to apply for innovative projects? 

Te Pūkenga will still need to show it is innovative as part of receiving strategic component funding which is included in its ‘on-Plan’ submission. It will be expected to prioritise projects according to the same strategic priorities.

What happens if funding doesn’t get used up / or allocated – what happens to the leftover money?

The TEC is still in the process of designing the elements of the contestable funding process, which we intend to make as simple, easy to navigate and understandable as possible.

We will provide further information on this when we discuss the draft process with you.

What is considered ‘innovative’?

The strategic component is aligned to the outcomes of the reforms.

Strategic component funding is not volume-based and for the purpose of progressing strategic priorities TEC will be looking to see how providers respond to and address National and Regional Skills priorities, and do so in forward-looking ways, i.e. investing in new technology or looking at new ways to train.

We know there can be high up-front costs for extramural provision so funding could be applied for where you are showing you are improving things for the future.

How has transitions funding been calculated?

Transitions funding is only for PTEs that are set to receive more than a 10% drop in funding (for delivery) and are delivering provision that is either priority, or niche (or a combination of both). 

What should transition funding be used for?

This is not an application-based fund and so there will not be a set of criteria to determine how the funding should be used other than what is provided for in the on-Plan funding conditions.

What monitoring or accountability arrangements will accompany the strategic component funding?

With regards the first element of this component (responding to regional and national skills priorities), Te Pūkenga will receive funding as part of the usual investment plan process, with expectations around this agreed through its plan. We expect Te Pūkenga to use this funding to meet both its charter obligation to create a sustainable national network of vocational education and to respond to national and regional skills priorities. For PTEs, we will link funding to progress against milestones agreed upfront as part of the contract for funding. We will respond quickly where there is evidence that a proposal is not delivering against expectations, including exiting early from unsuccessful projects. Part of the monitoring framework for successful proposals would be accountability to key stakeholders such as industry and iwi-Māori.

With regards the second element of this component (supporting the costs of programme development and maintenance), we will provide more information on the programme maintenance and development fund implementation process in 2022.

How are national and regional priorities being identified?

We will set regional and national skills priorities aligned with government priorities and based on advice from the Workforce Development Councils (WDCs), Regional Skills Leadership Groups (RSLGs) and Iwi Māori. We expect initial advice to be available in March and final advice in June.

Why can different provider-types access different elements of the strategic component?

A variety of provider types, each with a unique place in the system, participate in providing vocational education and training. The strategic component is designed to work with other funding to support and grow each provider type’s role.

Why does Te Pūkenga get such a big share of the strategic funding?

Te Pūkenga has a unique charter obligation to build a sustainable national network of provision. The strategic component funding will support it to deliver this while also meeting regional and national skills priorities and developing and maintaining programmes. Te Pūkenga has flexibility over its funding so it can develop a cohesive programme of initiatives that deliver on these interrelated objectives. Te Pūkenga’s strategic component funding will be subject to TEC oversight through its usual investment and monitoring mechanisms.

Will this add compliance costs to the sector?

It will enhance innovation and responsiveness to industry and regional needs, and recognises costs that have not previously been directly funded. We will design the requirements for funding in a way that enables innovation and minimises compliance costs.

What kind of programmes will be eligible for the programme development and maintenance fund?

We will prioritise programmes that are innovative, flexible, and responsive to new elements in the system, particularly where they align with the RoVE objectives and the vision of WDCs. We will confirm more details of this element in 2022.

Will I need to split my strategic intent (Investment plan) if I have both work-based Industry Training Register (ITR) and provider-based Single Data Return (SDR) delivery?

No, TEOs will need to cover all on-Plan funding in their strategic intent (investment plan), as opposed to providing separate documents for each investment source.

Who is responsible for entering provider-based or extramural training (such as block course or night courses) for a learner who is doing work-based training, where that training is delivered by a different provider?

The lead provider must submit this data via the SDR.

How do I, as a lead provider, report learning I have passed onto a subcontractor?

This will not change under the UFS. The lead provider must submit this data via the SDR and/or ITR.

Do sub-contractors enter their training they provide into the SDR?

No, only the lead provider should enter the delivery into SDR/ITR.

How do I report mode of delivery for work-based training?

The ITR is the main reporting system for work-based training. We use a combination of business logic and the additional manual reporting to identify mixed-mode learners.

Only those with access to the ITR will be able to report work-based delivery.

For more information, please see the tools and data section of our website.

What funding documents are changing for UFS funding in 2023?

The only changes are to the Mixes of Provisions (MoPs).

There are no changes to the other funding documents including no changes to Educational Performance Indicator commitments (EPICs) for 2023.

What Mix of Provisions (MoPs) do I need to submit for UFS funding in 2023?

You will have to submit a different Delivery Component MoP depending on the type of TEO you are and the mode(s) of delivery you use.

What should you do if you are a Private Training Establishment (PTE) and only use provider based and/or provider based extramural modes of delivery?

You need to submit the new PTE Delivery Component MoP template for L3-7 training. It includes new fields to capture mode of delivery. See an example of the new MoP (DOCX 31 KB).

What should you do if you are a Tertiary Education Institute (TEI) and only use provider based and/or provider based extramural modes of delivery?

You need to submit the new TEI Delivery Component MoP template for L3-7 (non-degree) delivery. It includes new fields to capture mode of delivery. See an example of the new MoP (DOCX 31 KB).

What should you do if you only use work-based, work-based: pathway to work, and assessment and verification modes?

You need to submit the new industry training register (ITR) Delivery Component MoP template. It includes new fields to capture mode of delivery and subject.

See an example of the new MoP (DOCX 31 KB).

What should you do if you use both work-based AND provider-based modes of delivery?

You need to submit the PTE Delivery Component MoP template or the TEI Delivery Component MoP template AND the ITR MoP template.

Do I use the new UFS MoP to report both UFS delivery component and L7 (degree) and above commitments?

No. Only use the new UFS Delivery Component MoP to return commitments for delivery at level 3 to 7 (non-degree).

Continue to use the SAC7D+ MoP (which remains the same as the current SAC3+ MoP) to return commitment for L7 (degree) and above

TEOs who deliver under UFS Delivery Component and L7 (degree) and above will complete 2 MoPs.

Why was a separate MoP created for UFS delivery component?

We currently have separate MoPs for each of our funds, so separate Delivery Component MoPs for UFS is consistent with our existing approach for data exchange.

The interim approach has been designed to minimise system change as much as possible for TEOs and student management system vendors.

Who submits learner data through ITR, SDR or additional reporting?

The Lead TEO – this is the TEO that holds the enrolment (learner) and is funded for all aspects of the learning.

The Lead TEO may subcontract learning to other providers.

Subcontractors should not report delivery.

Reporting provider-based aspects of work-based training arrangements must be reported by the Lead TEO through the SDR under source of funding 11.

Additional data will be submitted by the Lead TEO via Workspace2 (WS2). Download an example template (DOCX 31 KB).

How do I use the Source of Funding field in the SDR?

• Use source of funding code 01 for SAC L7 & above.
• Use source of funding code 37 for UFS learning that only uses provider-based & provider-based: extramural modes of delivery.
• Use source of funding code 11 for UFS learning for the provider-based elements of otherwise work-based delivery.

What is funding source code 11 and why is it important?

Funding code 11 (SOF11) captures the provider-based component of work-based delivery, for example block courses or night classes.

Providers will have to submit SOF11 data against the relevant, approved qualification that has been entered in Services for Tertiary Education Organisations (STEO). Generic qualifications, such as “Off-job training” must not be used.

If a learner is engaged in ‘off job’ learning at the end of the month, do I report them as active in the ITR?

Yes. Learners remain active in the ITR regardless of the learning setting, providing they are actively learning.

How do I report managed apprenticeships now?

We are working through options for reporting managed apprenticeships and will engage with TEOs in due course.

When are the additional reports and why do I need to submit them?

There will be at least two WS2 reporting templates. We anticipate that they will be submitted at the same time as SDR submissions. The templates are:

• Work-based – mixed mode delivery
• Work-based: pathway to work

We use the additional reporting to match data across the SDR and ITR datasets.

Download an example template (DOCX 29 KB).

A further template may be required for the Assessment and Verification mode.

How do I use the Attend field in the SDR?

Use the Attend field in SDR to identify provider-based or provider-based extramural modes of delivery. Updated guidance for the use of this field will be provided.

Is ITR being shut down?

No. The ITR continues to be required for the interim solution. There are no changes to ITR proposed.

When will my Delivery Component Mix of Provision (MoP) submission for 2023 be available to view in Ngā Kete?

We are currently updating the Ngā Kete products to reflect new UFS functionality and fields.

My Industry Training Commitments app:

• The My Industry Training Commitments app covers commitments and actuals relating to data submitted via the Industry Training Register.
• Updates to include UFS MoP data in the app are underway.
• Data definitions for the new UFS reporting fields (ie, Mode of delivery, Subject category and Study type) are now available in the app.
• The app will be renamed to My ITR Commitments.
• Expected delivery by the 3rd quarter of 2022.
• These changes will allow users to view their commitments by Mode of delivery, Subject category and Study type (as reported in the MoP submission).

My Commitments app:

• The My Commitments app covers commitments and actuals relating to data submitted via the Single Data Return (SDR).
• Updates to include UFS MoP data to this app are being carried out.
• This app will be renamed to My SDR Commitments.
• Expected delivery in the 4th quarter of 2022.
• These changes will allow users to view their commitments by Mode of delivery and will reflect new UFS funding categories (as reported in the MoP submission).