SAC levels 1 and 2 (non-competitive)


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Establishing a course or qualification

Equipment, infrastructure, and hardware

A tertiary education organisation (TEO) that receives Student Achievement Component (SAC) funding for provision at levels 1 and 2 on the New Zealand Qualifications Framework (NZQF), non-competitive allocation (for this website page, referred to as SAC(NC)) is required to provide the necessary equipment, infrastructure, and hardware required to deliver its courses.

“Equipment, infrastructure, and hardware” are items that can be used by successive intakes of students.  They do not include personal items that are provided for individual students' use that the TEO does not retain for the next intake of students.

A TEO must not charge for equipment, infrastructure, and hardware by including in the costs any fee, compulsory course cost, or compulsory student service fee, charged to a student.  It also must not require a student to meet the costs through the "course-related costs" component of the Student Loan Scheme as a condition of the student's enrolment. See Condition SACNC016.

However, in considering what equipment should be provided, a TEO should also consider the information about inducements, in Condition SACNC020

Overseas travel

A TEO must not use SAC(NC) funding to meet the costs of overseas travel for students, or require students to meet the cost of the travel by accessing the Student Loan Scheme, unless the overseas travel is academically essential.  See Condition SACNC015.  

The purpose of this restriction is to ensure public funds are spent appropriately, as any overseas travel needs to be a legitimate academic requirement of the course of study or training.  This also reduces the likelihood that students may enrol in a course in order to access subsidised overseas travel.

Although we consider it unlikely that overseas travel is academically necessary for a foundation level course, if a TEO wishes to include overseas travel within its course it must submit an application to us demonstrating that the travel is academically essential.

We will consider the following factors:

  • is the overseas travel integrally linked to the stated outcomes of a course?
  • is the course a compulsory requirement of a qualification and/or major?
  • are the academic outcomes for the course achievable in any other manner in New Zealand?
  • is the course or qualification aligned to the Tertiary Education Strategy?

Literacy and Numeracy for Adults Assessment Tool

TEOs that deliver SAC(NC)-funded programmes, training schemes or NCEA provision must use the Literacy and Numeracy for Adults Assessment Tool (the Assessment Tool) to assess its students. See Programme Eligibility and Condition SACNC006.

The Assessment Tool is a predominately online, adaptive tool that provides robust and reliable information on the reading, writing and numeracy skills of adults.

The Assessment Tool provides:

  • reading, writing, vocabulary, listening, speaking and numeracy assessments linked to the learning progressions
  • adaptive (and non-adaptive) assessment questions, using contexts which adults and young people may encounter in New Zealand
  • reporting for students, TEOs and the TEC.

TEOs must use the Assessment Tool to identify the literacy and numeracy needs of each student, and measure each student’s progress. See Condition SACNC/007.

TEOs that are new to using the Assessment Tool can find out more about what they need to do to prepare to use the Assessment Tool from the 'Assessment Tool Support' tab at

For qualifications in English for Speakers of Other Language (ESOL), TEOs must use the online “Starting Points” options to assess the student’s needs and assess progress.  See Condition SACNC007.

TEOs can also use the “Step Two Threshold Assessment for Reading” (STA) to assess students with very low reading skills.  Students who were ‘Below Threshold’ in initial STA reading assessment may be re-assessed using Starting Points, a vocabulary assessment, or a STA reading assessment. More information about how to use this assessment is contained in our guidelines for Assessment Tool and Step 2 Threshold (PDF, 356 Kb).

TEOs are not required to use the Assessment Tool for qualifications in Te Reo Māori. 

Charging fees and course costs

Setting fees and course costs for new courses

When a TEO establishes a new course, it must contact us to have the course approved for SAC(NC) funding (see Qualifications and courses page). As part of that process we receive information about the fee the TEO proposes to charge.  Before we will approve the course for SAC(NC) funding we will check if the fee or course cost for the new course is consistent with the fees and course costs charged for existing similar courses on a dollar per equivalent full-time student (EFTS) unit basis.

We expect the fees or course costs to be in the middle of the range of fees and course costs charged.

Some courses do have higher than usual costs and therefore justify higher than usual fee/course costs.  If we are concerned about the level of fees or course costs proposed to be charged to students, we may discuss this with the TEO.  We expect TEOs to be able to justify unusually high fees to ensure that access to public funding for those courses continues.

Limit on fees

Government policy limits the amount of fees that can be charged to a student undertaking foundation-level learning.  For SAC(NC), this means that a TEO must not charge a fee to a student who is under the age of 25 years old at the time the course commences.

For students who are over the age of 25, the TEO may elect to charge a fee, but must not charge a fee that is higher than the last time the TEO offered that course and charged a fee.  For example, if a TEO last offered a course in 2014 (and did not offer it in 2015), in 2016 the TEO may charge a student over the age of 25 the same fee that it charged in 2014.

See Condition SACNC024 for more information. 

Subcontracted delivery

The TEO must not subcontract delivery of any programme, training scheme, component course or part of a course, unless we have approved the subcontracted delivery as set out in Condition SACNC025.

Subcontracting refers to a situation in which a TEO uses SAC(NC) 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 a programme)
  • learning that occurs within vocational placements such a workplace placement or practicum.

TEOs can contact us to discuss any proposed contracting arrangements to determine whether or not these would be considered subcontracting.

TEOs are required to seek our approval to subcontract delivery as we may have concerns about the relevance, quality, or delivery of the provision, or concerns about the subcontracted party.

A TEO that has sought, and been approved, for a subcontracting arrangement must ensure that the subcontracted party does not further subcontract the delivery.  The TEO that we fund directly remains accountable to us for the use of the SAC(NC) funding and must comply with any conditions imposed by us on the approval of the arrangement.

Ideally, a TEO wanting to subcontract delivery would seek approval for the arrangement during the development of its Investment Plan.  If a TEO is seeking approval outside of the period, it should contact its Investment Manager or our Sector Helpdesk.

  • Last changed: 30 March 2016
  • Last verified: 30 March 2016