Funding, payments and learner fees – Youth Guarantee

Tuku pūtea, ngā utunga me ngā utu ākonga – Youth Guarantee

This page provides information about how Youth Guarantee (YG) funding is allocated, flexible funding for additional delivery, funding rates and how funding is calculated. There is also information about payment, funding recoveries and transport assistance funding.

On this page:

Funding mechanism

Each year, the responsible Minister(s) issue the funding mechanisms. These set out the purpose of each fund and gives us authority to us to administer the funding.

Funding is agreed through a tertiary education organisation’s (TEO’s) Investment Plan. For more information see Investment Plan guidance, templates and timeframes.

All TEOs that receive YG funding are required to:

comply with the requirements of the Education and Training Act 2020, and
comply with the funding conditions for the relevant year specified in their funding approval documentation.

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 each TEO through the annual investment process and in-year additional funding requests (if available).

EFTS definition

From 2023 the definition of a full-time, full-year workload (an equivalent full-time student [EFTS]) for a learner enrolled in a Level 1 or 2 Youth Guarantee qualification changed to 80 credits (from 120 credits).

This means that, for each EFTS reported in your Single Data Return (SDR), we will pay a 50% premium for Level 1–3 courses that are delivered toward a YG Level 1 or Level 2 qualification. These payments will be made on top of your approved YG allocations.

Our definition of 1 EFTS for a learner enrolled in a Level 3 YG qualification remains 120 credits.

Tracking learners’ YG EFTS consumption

You need to track each learner’s consumption of their 2.5 EFTS lifetime YG entitlement, factoring in these changes, 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 all 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 allocation and payments

Funding allocations, including any amendments, are available through DXP 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 may recover) Youth Guarantee Exceptional Circumstances Travel Assistance funding.

For the calculation of indicative allocations see the methodology from the relevant year. For more details regarding your specific allocation, please contact customerservice@tec.govt.nz or your Relationship Manager.

Funding rates

There are two funding rates for all YG provision – trades and non-trades rates per EFTS.

You can find the funding rates in Funding rates by year.

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.

Funding calculation

We calculate the amount of funding a TEO has consumed using:

the number of valid domestic student enrolments, measured in EFTS, and
the component courses within a programme that each valid domestic student is enrolled in.

We use the following elements to calculate consumed YG funding:

the metric (EFTS value)
delivery classification
funding category (trades or non-trades)
funding rate, and
learner enrolments.

You will submit the above information in the SDR. We will then work out the rate that your delivery will be funded at (trades or non-trades). A funding rate is applied to each qualification, not the individual courses. The rate that your qualification is funded at is determined by the funding category (trades or non-trades) that the majority of your delivery sits under.

All Level 1 delivery is categorised as non-trades. Delivery at Levels 2 and 3 is categorised as non-trades, except where more than 50% of the course EFTS are categorised as trades.

Disaggregated courses must add up to the total credit value of the qualification.

Example (rates may differ depending on year):

Step	Funding calculation	Example
1	Assign the qualification or micro-credential an EFTS value.	A TEO delivers NZ2104 New Zealand Certificate in Food and Beverage Service (Level 3) full-time over a half year of academic year study. It has a value of 0.5 EFTS. Note: We use 120 credits per EFTS for all qualifications in DXP Ngā Kete.
2	Assign the qualification a funding rate.	This is determined in conjunction with us. The rate will be trades or non-trades, 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 DXP Ngā Kete). Assign the appropriate delivery classification to each course.	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 #04: Business in the Delivery Classification Guide.
4	Apply the funding category.	The funding category alphabetic code is used to determine the category of the course as J (#04: Business). 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	We apply the funding rate (per EFTS) for the qualification or micro-credential to each course.	The funding rate for provision towards a non-trades qualification, including transport assistance, is $14,652 per EFTS.
6	Multiply the funding rate by the number of valid enrolments.	10 students enrol in the 3 courses in the qualification. The value of delivery in this qualification is $73,260 (excl. GST), ie, 0.5 x $14,652 x 10. Note: 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.

Premium allocation for Level 1 and 2 qualification provision

Since 1 January 2023, the definition of a full-time, full-year workload (1.0 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 Youth Guarantee premium allocation adjusts the overall YG funding you receive so that you are funded for 1.0 EFTS for every 80 credits you deliver for YG Level 1 and 2 qualifications.

This encourages providers to deliver Level 1 and 2 qualifications in a way that better reflects the expected workload for YG learners. Most YG learners require additional time and support to achieve a 120-credit qualification within a calendar year. This premium allocation supports the higher costs involved in supporting these learners.

You 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.

Your Mixes of Provision (MoPs), Single Data Return (SDR) reporting and DXP Ngā Kete information products will continue to calculate all YG funding and delivery volumes using the 1 EFTS = 120 credit definition.

We will allocate the YG premium separately, based on your Level 1 and 2 commitments in your YG Mix of Provision (MoP).

We will calculate your final allocation against your total YG delivery, including the Level 1 and 2 premium (and recover if you have been 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 allocation that you receive, for example if we agree to a change in your total allocation, or if you change your commitments within the allocation. If necessary, we will recalculate and adjust your premium allocation.

Significant changes to your MoP may require our prior approval. See our website for information on Significant Plan Amendments and Replacement Plans.

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 us 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.

Calculating funding for Level 1 and 2 qualification provision

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) (1 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.

Wellbeing and pathways support subsidy

The wellbeing and pathways support subsidy (renamed from "pastoral care subsidy" in 2023) is intended to fund a range of services tailored to the needs of individual learners. These services 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

You are expected to work with your YG learners and their whānau to develop a pathway plan to map “where to from here”. The plan is intended to support each learner’s needs to move from their YG programme to further study and/or employment. The level of detail will depend on each learner’s individual needs, what their goals are and what support they need throughout their study to meet those goals, as well as any post-study support they may need 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 to 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 funding conditions for the relevant year.

Travel assistance funding must only be used to pay for the actual cost of transport. We expect you 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 you establish a reimbursement per kilometre rate following guidance set by Inland Revenue (IRD).

If you supply the transport, the cost of the travel must not exceed the allowable per kilometre rate for business travel set by IRD.

Travel assistance funding paid directly to a learner must only be used to cover or reimburse costs associated with travel to and from the YG course/programme.

Records

You must keep records of all learner travel expenses and reimbursements to learners.

If you supply transport to your learners, you must keep records of this. 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 (so it can be determined which learners are enrolled in a YG funded programme).

Inland Revenue

If you supply transport, you must keep records of travel expenses in line with IRD 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, you cannot 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 you have incurred the cost yourself and can produce a GST invoice in support of the claim.

Travel assistance subsidy

The travel assistance subsidy is intended to adequately meet the costs associated with normal learner travel needs.

The transport assistance subsidy was increased in 2023 from $860 to $1,000 per EFTS, to better enable providers to support their learners’ transport needs.

As the travel subsidy is allocated per EFTS, you 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).

You 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 and may have higher transport needs.

For the full Exceptional Circumstances Transport Assistance funding requirements, see the funding conditions for the relevant year.

ECTA funding is based on EFTS delivered, and the remoteness of the site where delivery takes place. The degree of remoteness of TEO 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.

Funding for re-enrolling Youth Guarantee learners

Where a YG learner requires further study to complete their programme, 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 programme. 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, use the following formula:

EFTS value of the qualification less (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 programme, 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 they have 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 (or equivalent) 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.

Funding wash-ups

For the calculation of funding wash-ups see the methodology and technical specifications from the relevant year.

Note: for YG funding, the wash-up includes the YG premium but excludes any funding allocated to the wellbeing and pathway support rate.

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, you have not achieved, or are not achieving, an outcome anticipated in your Investment Plan for a tertiary education programme or activity in relation to which funding has been given under section 425 of the Act, or
you have not complied, or are not complying, with a condition on which funding has been given under section 425 of the Act, or
you have not provided, or are not providing, adequate and timely information required by the TEC or Ministry of Education under section 425 of the Act.

If you have your 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 funding conditions for the relevant year). We may offset the amount against any funding payable to you.

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.

You must not subcontract delivery of any YG funded programme without the prior written approval of NZQA (where you are quality assured by NZQA) and without our prior written consent.

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 your Investment Plan (Plan). The subcontracting specified in the Plan will be permitted for the period of the Plan. If the Plan expires then you will need to obtain approval 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, you 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 any 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 a 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 programme 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 programmes 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 leading to 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 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 programme not deemed to be full-time (ie, not approved for access to the Student Allowance and Student Loan Schemes) may still 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, including holiday weeks.

The table below shows this relationship. Programmes 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 who 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.