Source: Tertiary Education Commission
For the full requirements, see the Youth Guarantee funding conditions for the relevant year.
Funding mechanism
The Minister responsible for tertiary education issues the YG funding mechanism. The funding mechanism outlines the general form and essential components of the fund. It provides the mandate for the Tertiary Education Commission (TEC) to allocate the funding and what the funding can be used for, and details how we administer the fund.
Funding is agreed through a tertiary education organisation’s (TEO’s) Investment Plan. For more information see Plan Guidance and Toolkit.
A TEO that receives YG funding is required to:
The overall amount of YG funding available is set through the Government’s annual budget process. We determine the appropriate amount of YG funding for a TEO through the annual investment process and in-year additional funding requests (if available).
EFTS definition
Change to equivalent full-time student (EFTS) definition from 1 January 2023
From 2023 the definition of a full-time, full-year workload (an EFTS) for a learner enrolled in a Level 1 or 2 Youth Guarantee qualification is 80 credits (not 120 credits).
This means that, after each Single Data Return (SDR) submission, we will pay 50% more YG funding for Level 1–3 course enrolments delivered toward a Level 1 or Level 2 qualification. These payments will be made on top of approved YG allocations.
Our definition of one EFTS for a learner enrolled in a Level 3 YG qualification remains 120 credits.
The table below sets out the change.
Year
Qualification level(NZQCF)
Credits per EFTS
Notional hours per EFTS
Portion of a full-time, full-year workload
2018
1–3
120
1200
100%
2019
1, 2
100
1,000
3
120
1,200
2023
1, 2
80
800
3
120
1,200
Implications of the change
TEOs need to track learner consumption of each learner’s 2.5 EFTS lifetime entitlement carefully. This is particularly relevant for learners progressing from a Level 1 or 2 YG qualification to a Level 3 YG qualification.
From 2023, track student EFTS consumption as follows:
For Level 1 and 2 qualifications, track course enrolments that started:
before 31 December 2018 using 120 credits per EFTS,
before 31 December 2022 using 100 credits per EFTS, and
after 1 January 2023 using 80 credits per EFTS.
For Level 3 qualifications, track course enrolments using 120 credits per EFTS.
You must not enrol a learner in more than:
1.5 EFTS of Level 1 and/or 2 YG qualification provision in any calendar year; and
1.0 EFTS of Level 3 YG qualification provision in any calendar year.
Funding allocations and payments
Funding allocations, including any amendments are available through the My Allocations and Payments app on Ngā Kete.
YG funding is paid in equal monthly instalments from January to June, and in equal monthly instalments from July to December.
After each Single Data Return (SDR) submission we pay (and recover) Youth Guarantee Exceptional Circumstances Travel Assistance funding.
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.
Funding wash-ups
For the calculation of funding wash-ups see the methodology and technical specifications from the relevant year.
Premium allocation
The Youth Guarantee premium allocation adjusts the overall YG funding you receive so that you are fully funded for 1 EFTS for every 80 credits delivered at Level 1 and 2.
Since 1 January 2023, the definition of a full-time, full-year workload (one EFTS) for a learner enrolled in a YG qualification is:
80 credits for Level 1 and 2 qualifications; and
120 credits for Level 3 qualifications.
The purpose of the EFTS definition change was to encourage providers to deliver Level 1 and 2 programmes that better reflect the expected workload for YG learners. Providers had found that most YG learners require additional time and support to achieve a 120-credit programme within a calendar year. This allocation will support the high costs needs and support for the learner.
Providers may continue to offer programmes of up to 120 credits where that is appropriate for learners, possibly with more intense delivery models and pastoral care.
We will allocate the 50% funding premium for the Level 1 and 2 qualifications in your Level 1 and 2 commitment
We will allocate the YG premium based on your Level 1 and 2 commitments in your YG Mix of Provision (MoP).
We will calculate your final delivery against your total YG allocation, including the Level 1 and 2 premium and recovery if you were overpaid.
We will adjust your premium allocation, if required, due to other significant Plan changes
Significant Plan changes during the year may affect the amount of Level 1 and 2 premium required, for example if we have agreed a change in the total allocated, or there is a change in the distribution of your commitments within the allocation. If necessary, we will recalculate and adjust your premium allocation.
We will carefully review your submitted MoP to ensure we allocate the correct amount
We will monitor closely to ensure you allocate accurately as agreed with TEC in your MoP. This includes any changes agreed within the year. We will only accept and approve the MoP if the commitment is within the MoP tolerance (tolerance value identified in MoP instructions tab), and the distribution of the funding is in line with what was agreed and approved by the TEC. MoPs must be submitted in a timely matter.
We will take into account previous delivery patterns, and any specific agreements you have with us regarding changes to your MoP.
Funding rates
There are two funding rates for all YG provision – the trades and non-trades rates per EFTS.
The trades funding rate applies to trades provision at Levels 2 and 3 on the New Zealand Qualifications and Credentials Framework (NZQCF).
The non-trades rate applies to all other provision at Levels 1 to 3 on the NZQCF.
This page provides information on the YG funding rates.
Wellbeing and pathways support subsidy
The wellbeing and pathways support subsidy is intended to fund a range of services tailored to the needs of individual learners. This may include:
career planning and advice
specific cultural and learning support that is easy for the learner to access
an orientation programme that informs learners about access to financial assistance
extra-curricular activities
regular activities with other YG learners
building workplace connections, and/or
From 2023, TEOs are expected to work with learners and their whānau to develop a pathway plan to map “where to from here”. The plan would support each learner’s needs to move to further study and/or employment. The level of detail would depend on each learner’s individual needs, what their end goals are and what support they need throughout their study to meet those goals, as well as any post-study support the learner requires to take the next steps towards further study and/or employment.
We will allocate the wellbeing and pathways support allocation based on your total EFTS commitment in your MoP
We will calculate and pay the subsidy separately to your other YG funding.
We will not recover any of the subsidy where under-delivery occurs.
We will pay the subsidy on all eligible Flexible Funding over-delivery (up to 102% of your allocation) based on your December SDR reporting.
We will adjust your wellbeing and pathways support allocation, if required, due to other significant Plan changes
Significant Plan changes during the year may affect the amount of wellbeing and pathways support allocation you are entitled to, for example if we have agreed a change in the total allocated. If necessary, we will recalculate and adjust your wellbeing and pathways support allocation.
Travel assistance funding
For the full travel assistance funding requirements, see the Youth Guarantee funding conditions for the relevant year.
Travel assistance funding must only be used to pay for the actual cost of transport. We expect TEOs to take an “actual and reasonable” approach to the reimbursement of learner travel costs. This means if a learner uses:
public transport, the reimbursement of the student must be based on the appropriate concession rate, or
private transport, we recommend that the TEO establish a reimbursement rate on a case-by-case basis by contacting the AA.
If the TEO supplies the transport, the cost of the travel must not exceed 80 cents per kilometre travelled.
Travel assistance funding that is paid directly to a learner must only be used to cover or reimburse costs associated with travel to and from the YG course.
Records
The TEO must keep records of all learner travel expenses and TEO reimbursements to learners.
If the TEO supplies transport to learners, it must keep records of travel expenses. All travel records are to be made available to us on request. Records must include:
a daily travel logbook that sets out the kilometres travelled in relation to each learner, and
the source of funding for each learner’s enrolment at the TEO (for example, whether the learner is enrolled in a YG funded programme or otherwise).
Inland Revenue
If the TEO supplies transport, the TEO must keep records of travel expenses in line with Inland Revenue requirements.
There may be tax implications in the way that travel reimbursements are administered. Contact Inland Revenue directly for further information.
When reimbursing learners for travel, in general, TEOs are not able to claim GST input tax on this cost because the payments are made to individuals who are not registered for GST. GST input tax can only be claimed if the TEO has incurred the cost itself and can produce a GST invoice in support of the claim.
Travel subsidy
The travel assistance subsidy is expected to adequately meet the costs associated with normal learner travel needs.
As the travel subsidy is allocated per EFTS, the TEO may cross-subsidise by using more than the per EFTS rate for some learners (ie, where they have particularly high travel expenses), and less than the per EFTS rate for others (where they do not require the full amount).
The TEO must reimburse each learner within a reasonable time after they have incurred the cost.
Exceptional Circumstances Transport Assistance funding
Exceptional Circumstances Transport Assistance (ECTA) funding is to provide additional transport assistance to learners who live in relatively isolated areas who may have higher transport needs.
For the full exceptional circumstances transport assistance funding requirements, see the Youth Guarantee funding conditions for the relevant year.
ECTA funding is based on EFTS delivered, and the rural isolation of the site where the delivery took place. The rural isolation of TEOs’ delivery sites uses a classification system developed by Statistics New Zealand.
Based on the urban/rural classification we provide a “top-up” payment per YG EFTS at each delivery site as reported in each SDR submission.
These rates include a general 2.75% increase to funding for 2023.
2023 “top-up” payments
Urban/rural definition
Classification
Exceptional circumstances top-up rate per EFTS (GST exclusive)
Total travel subsidy rate per EFTS (GST exclusive)
Major urban area
Urban
$0
$1,000
Large urban area
Urban
$0
$1,000
Medium urban area
Urban
$645
$1,645
Small urban area
Urban
$1,075
$2,075
Rural settlement
Rural
$1,075
$2,075
Rural other
Rural
$1,075
$2,075
Funding calculation
Disaggregated courses must add up to the total credit value of the qualification, but unlike Delivery Qualification (DQ) funding, Youth Guarantee is not funded at the course level.
For a trades qualification at Levels 2 and 3 the funding calculation is: trades rate per EFTS x qualification EFTS value. Trades qualifications include NCEA where at least 50% of the courses are classified under Delivery on the NZQCF at Levels 7 (degree) and above delivery classification codes – alphabetic and numeric – as C1, L1, or P1. For further guidance see Trades and Non-Trades Learning Programmes – Ministry of Education.
For a non-trades qualification the funding calculation is: non-trades rate per EFTS x qualification EFTS value. Non-trade qualifications include NCEA where less than 50% of the courses are classified as trades courses.
Specifically, we calculate a 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.
To calculate a TEO’s consumed Youth Guarantee funding, we use the following elements:
the metric (EFTS value)
delivery classification
qualification funding category (trades/non-trades, which may also depend on level on the NZQCF), and
qualification funding rate.
Example only (rates may differ depending on year):
Step
Funding calculation
Example
1
Assign the qualification an EFTS value
A TEO’s NZ2104 New Zealand Certificate in Food and Beverage (Level 3) obtained through half a year of academic year study has a value of 0.5 EFTS.
Note: We use 120 credits per EFTS for all qualifications in STEO.
2
Assign the qualification a funding rate
This is determined in conjunction with us. The rate will be trade or non-trade, depending on whether the majority of course EFTS are trades or non-trades.
3
Disaggregate the qualification into courses
Calculate the EFTS factor of each course (Note: We use 120 credits per EFTS for all courses in STEO)
Classify the courses
The programme is disaggregated into three courses.
Each course has an EFTS factor of 0.1667 EFTS.
The subject matter of these courses is classified as #22 (Trades) in the Delivery Classification Guide.
4
Apply the funding category
Refer to Funding category (CATEGORY) under Information about courses:
The funding category alphabetic code is used to determine the category of the course as P (Trades #22).
The funding category numeric code is used to determine the category of the course as 1 (non-degree course with no research requirement, including certificates and diplomas).
5
Apply funding rates
The funding rate for provision towards a trade qualification, including transport subsidy, is $14,981 per EFTS, plus $2,000 per EFTS wellbeing and pathways support subsidy.
6
Multiply the funding rate by the number of valid enrolments
For 10 students on each of the 3 courses, each course attracts Youth Guarantee funding of $28,307.33 (excl. GST) calculated as (0.1667 x $14,981 x 10 = $24,973.33) + (0.1667 x $2,000 x 10 = $3,334.00).
This means the programme attracts $84,921.99 funding if 10 students enrol in each of the 3 programme courses.
Note: From 2023, for Level 1 and 2 qualifications, we pay a 50% premium in addition to each EFTS reported in your Single Data Return (SDR). This is to acknowledge our YG definition of an EFTS being 80 credits for Level 1 and 2 qualification delivery.
Calculating funding for Level 1 and 2 qualification provision
From 2023 onwards, we recognise that 80 credits is a full-time, full-year workload for a learner enrolled in a Level 1 or 2 Youth Guarantee qualification (or qualifications) (one EFTS).
As a result TEOs will receive 50% more funding for delivery of EFTS towards Level 1 and 2 qualifications.
The amount paid will be determined by the volume of Levels 1–3 course enrolment EFTS that lead towards Level 1 and 2 Youth Guarantee qualifications, as reported in the SDR.
We will fund up to 120 credits worth of delivery per learner in a calendar year.
You must not enrol a learner in more than:
1.5 EFTS (120 credits) for programmes leading to Level 1 and/or 2 Youth Guarantee qualifications; and
1.0 EFTS (120 credits) for programmes leading to Level 3 Youth Guarantee qualifications.
We will continue to fund up to 120 credits worth of delivery per learner in a calendar year.
Student’s 2023 enrolments
Credits
2023 EFTS
Credits ‘funded’
Definition
Delivered
Reported in the SDR
Funded (includes premium payment)
New Zealand Certificate in Foundation Skills (Level 2)
60
80 credits
0.7500
0.5000
0.7500*
60
New Zealand Certificate in Apiculture (Level 3)
65
120 credits
0.5417
0.5417
0.5417
65
Total
125
N/A
1.2917
1.0417
1.2917
125
* 0.500 Level 2 EFTS reported in the SDR plus the 50% premium = 0.750 Level 2 EFTS funded.
Re-enrolling a Youth Guarantee student
Where a YG learner 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.
Note: A learner who turns 25 years old while enrolled is not eligible to re-enrol.
For example:
A TEO enrols a learner in all courses linked to a 60-credit (0.5 EFTS) Level 3 qualification. The sum of the course EFTS factors is 0.5 EFTS.
The learner passes/achieves 30 credits from the 60-credit course enrolments. The TEO is funded 0.5 EFTS, for the 60 credits of courses the learner was enrolled in.
The TEO re-enrols the learner 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 learner was re-enrolled in.
The learner successfully completes the courses and is awarded the qualification.
The learner 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.
Calculating EFTS remaining vs consumed
To determine the exact value of the EFTS remaining for a returning learner, the following formula should be used:
Qual EFTS value – (credits completed/total qual credits x qual EFTS value) = remaining EFTS
For example:
0.5 – (30/60 x 0.5)
= 0.5 – 0.25
= 0.25 remaining EFTS
Notes:
You will need to ensure that when a learner needs more time to complete their qualification, other learners are enrolled to ensure you deliver fully on your Mix of Provision (MoP) EFTS commitment and consume all funding for the year.
Consider a learner’s course re-enrolments before you enrol them in a further programme. Where a learner does not complete a course successfully and you re-enrol them and claim funding, the learner is consuming additional EFTS towards their entitlements.
Flexible funding
We fund eligible TEOs for eligible Youth Guarantee provision above the amount the TEO has been approved to deliver. This is to provide TEOs with flexibility to meet additional learner demand.
For further information about flexible funding, please see the Youth Guarantee funding conditions for the relevant year.
Flexible funding:
is payable for provision towards qualifications that we have agreed to fund in your Mix of Provision (MoP)
does not mean we have changed your approved funding allocation, and
is subject to the conditions that we have imposed on your funding.
The external evaluation and review (EER) category referred to in the funding conditions will be the highest published EER category for the TEO during the funding year to which flexible funding is being applied.
Flexible funding is calculated using the December Single Data Return (SDR). Payments are made in March of the following year.
Suspending or revoking funding
Under clause 16 of Schedule 18 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 TEO 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, or
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 clause 16 of Schedule 18 of the Act, the unspent portion of funding is repayable to us on demand (see the Youth Guarantee funding conditions for the relevant year). We may offset the amount against any funding payable to the TEO.
Subcontracting
Subcontracting refers to a situation in which a TEO uses TEC funding to pay another organisation to deliver teaching or assessment on its behalf. This excludes:
teaching and learning activities contracted to individuals or organisations that are not TEOs (for example, an employee on a fixed-term contract, an honorary staff member, or a contract for teaching and learning services with a subject-matter expert for part of the programme such as for First Aid provision)
research activities or postgraduate research supervision, and
learning that occurs within vocational placements such a workplace placement or practicum.
A TEO must not subcontract delivery of any YG funded programme without the prior written approval of NZQA where the TEO is quality assured by NZQA and without prior written consent from us.
Note: To gain approval, you must demonstrate how the subcontracting arrangement would benefit the YG programme.
If we approve a subcontract arrangement
Subcontracting can be agreed in two ways
If we approve a subcontract arrangement, the subcontracting can be agreed to within a TEO’s Investment Plan (Plan). The subcontracting specified in the Plan will be permitted for the period of the Plan. If the Plan expires then approval will need to be obtained from us again.
Subcontracting can also be agreed outside of a Plan. Again, the subcontracting specified will be permitted for the period agreed with us.
At any time, TEOs can contact us to discuss proposed subcontracting.
Subcontracting TEO obligations
As specified in section 425 of the Education and Training Act 2020, it is a condition of a TEO receiving funding under section 425 that the TEO will supply to us, from time to time as required by us, and in a form specified by us, any financial, statistical, or other information that we require the TEO to supply.
Therefore, at any time, we can request information regarding subcontracted activities from the TEO (that has subcontracted another party to carry out the activities).
In addition, a TEO that has subcontracted another party to carry out its activities:
must comply with any conditions imposed by us within a consent to subcontract; and
must ensure that the subcontracted party does not further subcontract any functions; and
will be accountable to us for the use of the YG funding, including in respect to legislative and funding condition requirements.
Student Allowance and Student Loan Scheme payments
A qualification must be approved for TEC funding before a learner can access the Student Allowance and Student Loan Schemes. YG learners are only eligible for some aspects of the Student Loan Scheme. For further information on eligibility visit StudyLink.
Qualifications delivered full-time
We will only approve a YG funded qualification for learner access to Student Allowance Student Loan Schemes if the programme:
is delivered full-time
runs for a minimum of 12 weeks, and
has an EFTS value of at least 0.3.
A full-time YG programme must be made up of at least 0.5 EFTS, comprising one or more qualifications. Where there is recognition of prior learning (RPL) for some of the programme, the learner’s individual programme following RPL must be at least 0.5 EFTS.
Qualifications delivered part-time
A programme for a qualification of less than 0.3 EFTS is classified as part-time regardless of the number of weeks over which it is delivered. A part-time programme for a qualification is not eligible for learner access to the Student Allowance Scheme.
For a YG funded part-time programme leading to a qualification, we will only approve learner access to the Student Loan Scheme if the programme meets one of the following criteria:
it runs for 32 weeks or more and has an EFTS value of at least 0.3 EFTS, or
it runs for fewer than 32 weeks with an EFTS value of between 0.25 and 0.3 EFTS.
Loan entry threshold
The loan entry threshold (LET) is used to identify the minimum EFTS value required for a learner’s individual study programme to be deemed full-time. This affects learner eligibility for the Student Allowance and Student Loan Schemes. A qualification that is not deemed to be full-time (ie, not approved for access to the Student Allowance and Student Loan Schemes) can nevertheless be funded through YG.
The LET is determined by matching a range of gross weeks to a range of EFTS values. A gross week is the total length of enrolment in a programme of study, including holiday weeks.
The table below shows this relationship (qualifications of less than 0.3 EFTS may still be eligible for learner access to the Student Loan Scheme).
Loan entry threshold table
Length of enrolment(Gross weeks)
Loan entry threshold(EFTS)
12
0.3
13
0.3
14
0.3
15
0.3
16
0.4
17
0.4
18
0.4
19
0.4
20
0.5
21
0.525
22
0.55
23
0.575
24
0.6
25
0.625
26
0.65
27
0.675
28
0.7
29
0.725
30
0.75
31
0.775
32–52
0.8
53 or more
1.0
Student allowances – paid practical work
Learners that undertake paid practical work as part of their course of study are not entitled to any student allowance payments for the week(s) they undertake that work. It is important that you discuss this with your learners.
For more information on student allowance entitlements and paid practical work please see StudyLink.
