The Youth Guarantee funding mechanism is issued by the Minister responsible for tertiary education. The funding mechanism outlines the general form and essential components of the fund. It provides the mandate for us 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 (i.e. it is on-Plan funding). A TEO that receives funding from the Youth Guarantee Fund is required to:

• comply with the requirements of the Education and Training Act 2020, and
• comply with the funding conditions specified in its funding approval documentation.

Funding for Youth Guarantee is set through the Government’s annual budget process. We determine the appropriate amount of Youth Guarantee funding for a TEO. 

Through each TEO’s Plan, we agree the mix of provision (MoP). This includes the qualifications that the funding can be used for, and the allocation of funding towards, and the volume of delivery expected for, each qualification.

We determine funded delivery volume using the equivalent full-time student (EFTS) funding model. One EFTS means the student workload that would normally be carried out by a student enrolled full-time in a single academic or calendar year.

We will fund up to one EFTS worth of Youth Guarantee provision per eligible student per calendar year. See Condition: Student eligibility under Use of YG Fund Funding for eligible students.

Change to EFTS definition from 1 January 2019

From 2019 the definition of a full-time, full-year workload (an EFTS) for a student enrolled in a level 1 or 2 Youth Guarantee qualification is 100 credits (not 120 credits).

This means that, after each SDR submission, we will pay 20% more Youth Guarantee 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 Youth Guarantee allocations.

Our definition of one EFTS for a student enrolled in a level 3 Youth Guarantee qualification remains 120 credits.

The table below sets out the change from 2019. 

Implications of the change

There are no system or reporting changes for 2019. See Reporting.

TEOs need to track student consumption of each student’s two EFTS entitlement carefully. This is particularly relevant for students progressing from a level 1 or 2 Youth Guarantee qualification delivered in 2019 or after to a level 3 Youth Guarantee qualification.

From 2019, 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, and
  • after 1 January 2019 using 100 credits per EFTS.
• For level 3 qualifications, track course enrolments using 120 credits per EFTS.

See Condition: Student eligibility under Use of YG Fund Funding for eligible students.

You must not enroll a student in more than:

• 1.2 EFTS (120 credits) for programmes leading to Youth Guarantee level 1 and/or 2 qualifications, and
• 1.0 EFTS (120 credits) for programmes leading to Youth Guarantee level 3 qualifications.

See Condition: Student eligibility under Use of YG Fund Funding for eligible students.

A simple way to track consumption for the purposes of this funding condition is to use 120 credits per calendar year (as long as course enrolment EFTS factor and credit value align). Some SMS systems already track consumption using this method.

Most 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.

After each Single Data Return (SDR) submission we pay (and recover):

• Youth Guarantee Exceptional Circumstances Travel Assistance funding, and
• from 1 January 2019, a premium payment for course enrolments leading to award of level 1 or 2 Youth Guarantee qualifications.

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.

The methodology and technical specifications for the calculation of 2022 funding wash-ups can be found in the 2022 Global Wash-up Methodology document.

2022 Global Wash-up Methodology (PDF 1.1 MB)

The Youth Guarantee Premium allocation funds qualifications at Level 1 and 2 at 20% above the standard Youth Guarantee rates.  The allocation adjusts the overall Youth Guarantee funding you receive so that you are fully-funded for 1 EFTS for every 100 credits delivered at level 1 and 2.

Since 1 January 2019, the definition of a full-time, full-year workload (one EFTS) for a student enrolled in a Youth Guarantee qualification is:

• 100 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 Youth Guarantee students. Providers had found that most Youth Guarantee students 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 students, possibly with more intense delivery models and pastoral care.

We will allocate the 20% 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 2020 Mix of Provision (MoP) file.

We will calculate your final delivery (including the premium relating to actual delivery at levels 1 and 2) against your total YG allocation including the premium and recovery if you were over-paid.

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 Mix of Provision to ensure we allocate the correct amount

We will monitor closely to ensure you allocate accurately as agreed with TEC in your Mix of Provision (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 of $11,000 and the distribution of the funding is in line 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.

There are two funding rates for all Youth Guarantee 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 Framework (NZQF).

The non-trades rate applies to all other provision at levels 1 to 3 on the NZQF.

Funding rates for Youth Guarantee provision for 2023

The funding rates per EFTS are:

* In this table, EFTS refers to 120 credits provision at levels 1 to 3 on the NZQF.

The pastoral care subsidy is intended to fund a range of services tailored to the needs of individual students. This may include:

• career planning and advice
• specific cultural and learning support that is easy for the student to access
• an orientation programme that informs students about access to financial assistance
• extra-curricular activities
• regular activities with other Youth Guarantee students, and/or
• counselling.

See Condition: Travel Assistance funding.

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 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 the TEO 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 a student must only be used to cover or reimburse costs associated with travel to and from the Youth Guarantee course.

Records

The TEO must keep records of all student travel expenses and TEO reimbursements to students.

If the TEO supplies transport to students, 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 student, and
• the source of funding for each student’s enrolment at the TEO (for example, whether the student is enrolled in a Youth Guarantee 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.

However, when reimbursing students 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 student 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 students (i.e. 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 student 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 students who live in relatively isolated areas who may have higher transport needs. See Condition: Travel Assistance funding. TEOs are not required to submit additional information to us to access this funding.

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 (page 25) developed by Statistics New Zealand. 

In 2018 Statistics New Zealand updated the urban rural classification which had an impact on how the Youth Guarantee ‘top up’ payments are calculated from 2022 onwards.

Each TEO delivery site is classified against one of six urban/rural categories in 2022, instead of eight urban/rural categories in 2021.

Based upon the urban/rural classification we provide a ‘top-up’ payment per Youth Guarantee EFTS at each delivery site as reported in each Single Data Return (SDR) submission.

2021 ‘top-up’ payments

These rates include a general 1.2% increase to funding for 2022

2022 ‘top-up’ payments

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.

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 SAC course classification codes - alphabetic and numeric - as C1, L1, or P1.

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)
• course classification
• qualification funding category (trades/non-trades which may also depend on level on the NZQF), and
• qualification funding rate. 

Example only (rates may differ depending on year):

Calculating funding for level 1 and 2 qualification provision

From 2019 onwards, we recognise that 100 credits is a full-time, full-year workload for a student enrolled in a level 1 or 2 Youth Guarantee qualification (one EFTS).

As a result TEOs will receive 20% 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 student in a calendar year
You must not enroll a student in more than:

• 1.2 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.

See Condition: Student eligibility under Use of YG Fund Funding for eligible students.

We will continue to fund up to 120 credits worth of delivery per student in a calendar year.  

Example: In 2019 a new Youth Guarantee student enrols in both the 60 credit National Certificate in Foundation Skills (Level 2) and the 65 credit New Zealand Certificate in Apiculture (Level 3). We will fund 120 credits worth of delivery, comprising 0.6 level 2 EFTS and 0.5 level 3 EFTS.

*    0.500 level 2 EFTS reported in the SDR plus the 20% premium = 0.600 level 2 EFTS funded.

** Because the student has been funded for 60 credits at level 2, we only fund up to 60 credits for the level 3 qualification (0.5 EFTS).

Also see Reporting under Monitoring and reporting.

Recognition of prior learning / prior achievement

Recognition of learning / prior achievement relates to previous study or experience (prior achievement) relevant to a programme that a student is currently undertaking. It enables a student to proceed with his or her study without repeating aspects of the qualification previously studied, or re-learning skills the student has already achieved through past work or other experience.

Recognition of prior learning (RPL), and credit recognition and transfer (CRT), are forms of recognising learning / prior achievement. The New Zealand Qualifications Authority (NZQA) provides information and guidelines on recognition of learning / prior achievement for TEOs.

RPL and CRT for Youth Guarantee students

Students may have already some knowledge of, or achieved, some courses or course content prior to enrolment in a Youth Guarantee funded qualification.

The TEO must recognise this prior learning and adjust the courses in the student’s programme. The TEO must not claim Youth Guarantee funding for:

• recognising this prior learning, or
• delivering tuition where the student already has this prior learning (i.e. skills and/or knowledge).

See Condition: Recognised prior learning under Use of YG Fund Funding for eligible students.

We expect the TEO to engage with students at enrolment to determine whether they are likely to have existing knowledge, skills, and attributes that can contribute to the graduate outcomes of the qualification.

If the student has achieved course content previously, the TEO must work out the EFTS factor of the unit or achievement standards previously credited to the student (using the 120 credits per EFTS calculation). The TEO must then subtract this from the standard course EFTS factor. The revised EFTS factor is the value that the TEO should then submit in the enrolment file of the SDR, in the FACTOR field, for that student.

Re-enrolling a Youth Guarantee student

Where a Youth Guarantee student 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: For students who are 20 years old, see A student who turns 20 years old while enrolled is not eligible to re-enrol under Student eligibility.

For example:

A TEO enrols a student 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 student passes/achieves 30 credits from the 60 credit course enrolments. The TEO is funded 0.5 EFTS, for the 60 credits of courses the student was enrolled in.

The TEO re-enrols the student 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 student was re-enrolled in.

The student successfully completes the courses and is awarded the qualification.

The student 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 student, the following formula should be used:

Notes: 

You will need to ensure that when a student needs more time to complete their qualification, other students are enrolled to ensure you deliver fully on your mix of provision (MoP) EFTS commitment and consume all funding for the year. 

Consider a student’s course re-enrolments before you enroll them in a further programme. Where a student does not complete a course successfully and you re-enrol them and claim funding, the student is consuming additional EFTS towards their entitlements.

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 student demand. See Condition: Flexible funding for further information.

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  Condition: Flexible funding 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.

Under Schedule 18 Clause 16 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
• 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 Schedule 18 Clause 16 of the Act, the unspent portion of funding is repayable to the TEC on demand (see Condition: Suspension or revocation of YG Fund Funding). We may off-set the amount against any funding payable to the TEO.