Youth Guarantee

Funding and payments

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Funding for Youth Guarantee is set through the Government’s annual budget process. The TEC then allocates the available funding according to an annual allocation methodology.

We must allocate and determine the amount of Youth Guarantee funding payable to a tertiary education organisation (TEO) in accordance with the Minister for Tertiary Education, Skills and Employment's funding mechanism (PDF, 453 Kb) under section 159L of the Education Act 1989 (the Act).

When allocating funding, we will consider:

  • whether the TEO is eligible for Youth Guarantee funding
  • the nature of the qualifications offered by the TEO
  • the region of delivery of the TEO
  • the use of the Literacy and Numeracy for Adults Assessment Tool
  • delivery volumes
  • pastoral care arrangements for students made by the TEO
  • the TEO's past performance against the Youth Guarantee performance framework
  • the TEO’s performance against Youth Guarantee policy settings.

Once funding is allocated and approved via an Investment Plan, we will monitor the activities of a TEO against those outlined in its Investment Plan. A TEO that receives Youth Guarantee funding is required to:

  • comply with the requirements of the Act (including achieving outcomes specified in its Investment Plan)
  • comply with the funding conditions specified in the TEO's Plan funding approval letter.

Funding allocation

Youth Guarantee uses an equivalent full-time student (EFTS) funding model. One EFTS means the student work load 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 1200 hours of learning and is equivalent to 120 credits.

Each student may access up to 1 EFTS worth of learning per calendar year. We may agree to fund an individual's student's enrolment for more than 1.0 EFTS in a year if  this is approved in advance.

For more information see Student eligibility and Condition YG010 and Condition YG012


Funding available for additional delivery

From 2016, the TEC will fund Youth Guarantee delivery for additional enrolments above the amount the TEO has been approved to deliver. This will provide TEOs with flexibility to meet additional student demand.

Funding for additional delivery:

  • is limited to 2% of a TEO’s approved funding allocation or 10 EFTS (whichever is greater)
  • is payable for provision that we have already agreed to fund
  • does not mean we have changed your TEO’s 2016 approved funding allocation
  • is subject to the conditions that we have imposed on your funding.

To be eligible for additional Youth Guarantee funding, TEOs must:

  • have a NZQA External Evaluation and Review (EER) rating of Category 1 or 2
  • be approved by us to deliver a minimum of 20 funded EFTS in non-trades provision, or 15 funded EFTS of trades provision, and
  • have an average 2015 course completion rate of 55% or higher.

Additional funding for 2016 will be calculated using the December 2016 Single Data Return (SDR). Payments will be made in March 2017.

These changes are included in a supplementary funding mechanism for 2016 for the major teaching and learning funds. 

For more information, see Condition YG028 or Condition YG029.

Funding rates

There are two funding categories for all Youth Guarantee provision funded by the TEC – trades and non-trades.

The trades funding rate is $14,300 per EFTS, and applies to trades provision at levels 2 and 3 on the New Zealand Qualifications Framework (NZQF).

The non-trades rate is $10,800 per EFTS and applies to all other provision at levels 1 to 3 on the NZQF.

Each funding rate includes an $800 travel subsidy and a $500 pastoral care subsidy.

Funding per EFTS (1200 hours)



Fee and course costs



Pastoral care subsidy



Transport assistance subsidy



Total Rate



Pastoral care

The pastoral care subsidy of $500 per EFTS is intended to funding a range of services tailored to the needs of individual students. This may include:

  • specific cultural and learning support
  • career planning and advice
  • extra-curricular activities
  • an orientation programme
  • regular activities with other Youth Guarantee students
  • counselling.

Travel subsidy

The travel assistance subsidy of $800 per EFTS is expected to adequately meet the costs associated with student travel needs. Where a student has significantly higher travel expenses, TEOs may use another student's travel subsidy (where that student does not require the full amount) to cross-subsidise that expense.

All travel assistance funding must only be used to pay for the actual cost of transport (Condition YG015). We expect TEOs to take an "actual and reasonable" approach to the reimbursement of student travel costs. This means if a student uses:

a)   public transport, the reimbursement of the student must be based on the appropriate concession rate, and

b)   private transport, we recommend that TEOs contact the AA to establish a reimbursement rate on a case by case basis.    

If the TEO supplies the transport, the cost of the travel must not exceed 80 cents per km travelled.

Travel assistance funding that is paid directly to students must only be used to cover or reimburse costs associated with travel to and from the Youth Guarantee course.

TEOs must keep records of travel expenses in line with Inland Revenue requirements. All travel records are to be made available to us on request. TEOs should be aware that there may be tax implications in the way that travel reimbursements are administered. TEOs are advised to contact Inland Revenue directly for further information. When reimbursing students for travel, in general, TEOs will not be able to claim GST input tax on this cost. This is because the payments are made to individuals who are not registered for GST. GST input tax can only be claimed if TEOs have incurred the cost themselves and can produce a GST invoice in support of the claim.

In addition, some TEOs may receive a ‘top-up’ from the exceptional circumstances transport assistance fund.

Funding calculation

Disaggregated courses must add up to the total credit value of the qualification, but unlike Student Achievement Component (SAC) funding, Youth Guarantee is not funded at the course level.

We will only fund a qualification for up to 1 EFTS in one year. For more information about calculating EFTS, see the SDR Manual.

For a trades qualification at levels 2 and 3 (which includes NCEA where at least 50% of the courses are classified under SAC course classification codes as C1, L1, or P1), the funding calculation is: $14,300 x qualification EFTS value.

For a non-trades qualification (which includes NCEA where less than 50% of the courses are classified as trades) the funding calculation is: $10,800 x qualification EFTS value.

The reference to a course that is classified as C1, L1, or P1 means a course that is designed for a non-degree qualification with no research requirement, including a certificate and diploma, in the disciplines set out in the table below.


Relevant discipline and course classifications


Architecture (degree) [#02]
Engineering [#11]
Technology [#11]
Health Sciences [#13]
Vocational Training For Industry [#22.1]
Midwifery (3 year) [#27]
Speech Language Therapy [#32]
Medical Laboratory Science [#33]
Audiology [#35]


Agriculture (non-degree) [#01]
Horticulture (non-degree) [#01]
Osteopathy [#03.1]
Acupuncture [#03.1]
Vocational Training for Industry [#22.1]
Nursing [#24]


Trades 2 [#22]
Vocational Training for Industry [#22.1]

The minimum time period for a student to withdraw from any course without the TEO needing to pay back Youth Guarantee funding to the TEC is 10% of the course completed or one month completed, whichever is the lesser (as outlined in the SDR Manual). 


Qualification codes for NCEA

TEOs that have been approved for NCEA level 2 with a Vocational Pathway and deliver one qualification as both a trade and non-trade (i.e. one student is enrolled on 50% of P1, C1, L1 courses while another is enrolled on 50% A1, J1) need to set up two separate qualification codes to reflect these different programmes. This requirement also extends to NCEA level 3 and/or any other NZQF qualification that is delivered as both non-trades and trades for Youth Guarantee.

TEOs that have recently been approved to deliver NCEA level 2 with a Vocational Pathway and need to set this up on TEC STEO should use the updated qualification codes below.

Note that where the qualification will only ever be delivered as either a trade or non-trade, only one relevant qualification code needs to be set up (i.e. if it is a non-trade NCEA level 2 in Service Industries, only use code NCEP4N).







National Certificate in Educational Achievement L1


YG Non-Trades


Construction and Infrastructure Trade L2


YG Trades


Construction and Infrastructure Non-trade L2


YG Non-Trades


Manufacturing and Technology Trade L2


YG Trades


Manufacturing and Technology Non-trade L2


YG Non-Trades


Primary Industries Trade L2


YG Trades


Primary Industries Non -trade L2


YG Non-Trades


Service Industries Trade L2


YG Trades


Service Industries Non-trade L2


YG Non-Trades


Social and Community Services Trade L2


YG Trades


Social and Community Services Non-trade L2


YG Non-Trades


Creative Industries Trade L2


YG Trades


Creative Industries Non-trade L2


YG Non-Trades


National Certificate in Educational Achievement Trades L3


YG Trades


National Certificate in Educational Achievement Non-trade L3


YG Non-Trades

Funding prior achievement

Some Youth Guarantee students may have already achieved some unit standards prior to enrolment in Youth Guarantee. A TEO must not claim funding for recognised prior learning credited to a student, for example course content which is the same as that which a student has previously achieved or been awarded credit for. For more information, see Condition YG023.

If a course contains content which a student has achieved previously, the TEO must work out the EFTS factor of the units previously credited and subtract this from the standard course factor. This revised figure is the value that the TEO should then submit in the enrolment file of the SDR, in the FACTOR field, for the particular student.

Where a Youth Guarantee student requires further study to complete their qualification, their continuing study can only be to complete the courses that they have not yet passed. This can include content not yet studied OR content studied and assessed, but requiring a re-sit.

For example, a TEO enrols a student in all courses linked to a 60 credit (0.5 EFTS) qualification. The student consumes 0.5 EFTS in this first enrolment. If the student only passes/achieves 30 credits in the first enrolment and they re-enrol for a second period of study, this can only be to complete the remaining 30 credits, and the TEO will only be funded for the remaining parts.

To determine the exact value of the EFTS remaining for a returning student, the following formula should be used:

Qual EFTS value - (credits completed/total qual credits x qual EFTS value) = remaining EFTS
0.5 - (30/60 x 0.5 = 0.25) = 0.25 remaining EFTS

In the example above, 0.5 EFTS were consumed in the first enrolment and 0.25 EFTS were consumed in the second enrolment. This gives a total of 0.75 EFTS (0.5+0.25) worth of learning delivered for this student which the TEO may claim funding for.

TEOs will need to ensure that when a student requires longer to complete their qualification, replacement students are enrolled to help consume full funding for the year. 

Exceptional circumstances transport assistance funding

The purpose of exceptional circumstances transport assistance funding is to subsidise student travel where the subsidy provided as part of the standard funding rate is inadequate to meet the needs of students. Exceptional circumstances transport assistance funding will be provided to TEOs based on actual EFTS delivered and the rural isolation of the site where delivery took place.

TEOs will no longer be required to submit additional information to us to access this funding.

The methodology classifies the rural isolation of TEO’s delivery sites using a classification system developed by Statistics New Zealand. Each TEO delivery site will be classified against one of eight urban/rural categories, shown below. Based upon the urban/rural classification we will provide a ‘top-up’ payment per actual Youth Guarantee EFTS at each delivery site as reported in each single data return (SDR) submission.


Urban/rural definition


Exceptional circumstances top up rate per EFTS

Total travel subsidy rate per EFTS

Main Urban area




Satellite Urban area




Independent Urban area




Rural area with high urban influence




Rural area with moderate urban influence




Rural area with low urban influence




Highly Rural/Remote area 




Area outside urban/rural profile






Youth Guarantee funding is paid in monthly instalments. The payment amounts are in equal instalments from January to June, and in equal instalments from July to December. 

Funding recoveries

The TEC is required under the Youth Guarantee funding mechanism to recover funding where the results of an audit, reporting or statistical return show a TEO has under-delivered against expected performance targets as described in their agreed Investment Plan. See Condition YG024.

Recovery of Youth Guarantee funding will be calculated on dollars consumed and funding will be recovered for delivery below 100%. In practice, this means funding consumed will be calculated at the qualification level by applying the applicable trade/non-trade rate (including the travel component of $800 per EFTS) to the number of EFTS delivered. The difference between the total funded (dollar) amount in the approved Investment Plan and the total (dollar) delivered amount will be recovered. For example:

A student was enrolled in a Youth Guarantee programme comprising a 0.7 EFTS trades course, and a 0.6 EFTS non-trades course. This results in a total enrolment value of 1.3 EFTS, with 0.3 being recovered. The amount to be recovered would be calculated as follows:


To calculate value of 1 EFTS

0.7 EFTS at the trades rate $10,010
0.3 EFTS at the non-trades rate $3,240
Total value of 1 EFTS $13,250
To calculate the amount to be recovered Remaining 0.3 EFTS at the non-trades rate: $3,240

Recoveries will be based on the December SDR and will occur in early in the following year.

The $800 transport subsidy component of funding will no longer be recovered through a separate process and will be included in the calculation of recoveries as outlined above. TEOs must continue to keep records of all travel expenditure as we may ask for this on request. Exceptional Circumstances ‘top-up’ funding will not be subject to recovery unless there is a decrease in EFTS between the April/August and December SDRs. 


  • Last changed: 7 March 2016
  • Last verified: 7 March 2016