Smart and Skilled: Training provider guide to 2015 prices, fees and subsidies

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1 Smart and Skilled: Training provider guide to 2015 prices, fees and subsidies NSW DEPARTMENT OF EDUCATION AND COMMUNITIES

2 Smart and Skilled: Training provider guide to 2015 prices, fees and subsidies Contents Introduction... 1 Setting prices... 2 Base prices... 2 Loadings... 3 Support for thin markets... 3 Student fees and subsidies... 4 Standard student fees and subsidies... 4 Traineeship fees and subsidies... 4 Apprenticeship fees and subsidies... 4 Concession fees and subsidies... 4 Exemptions... 5 Other fees and subsidies... 5 Transition student fees and subsidies... 7 Continuing students from Price and fee administration... 9 Price administration... 9 Fee administration NSW DEPARTMENT OF EDUCATION AND COMMUNITIES

3 Introduction This guide to 2015 prices, fees and subsidies applies to all government subsidised qualifications and part-qualifications covered by the 2015 NSW Skills List. The price of a qualification is the amount paid to the training provider and reflects the efficient cost to deliver training. This price is made up of a government subsidy and a student fee. The IPART Final Report can be found at The NSW Government s response to the IPART Final Report can be found at The Smart and Skilled pricing arrangements are informed by the Independent Pricing and Regulatory Tribunal (IPART) review conducted in 2013 and the advice of the independent NSW Skills Board. NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 1

4 Setting prices Base prices In line with IPART s recommendations, the base price for a qualification is the efficient cost to deliver training to a standard student. A standard student lives in a metropolitan area and is not eligible for a disadvantaged price loading. Part-qualifications Part-qualifications are bundles of units of competency or skill sets that make up a short course that is not a full qualification. Three types of part-qualifications are: Pre-vocational provides students with the skills to undertake vocational training. The costs associated with training include teaching staff, administration, utilities, course-specific costs and capital costs. They cover both variable and fixed costs. A set base price has been calculated for each qualification on the 2015 NSW Skills List. The full schedule of base prices for 2015 can be found at Base price for recognition of prior learning Pre-apprenticeship or pre-traineeship provides potential apprentices and trainees with preliminary skills in a specific vocation. Targeted skill areas these address identified skill needs or skill shortages for target areas covered by the 2015 Skills List. The courses are skill sets or a combination of units from one or multiple training packages. Recognition of prior learning (RPL) is the assessment of the skills and knowledge an individual has achieved outside the formal education and training system. RPL also includes recognition of current competencies (RCC), where an individual is reassessed for previous completion of some or all course requirements to ensure that the competence has been maintained. The base price for training for units of competency accredited as RPL or RCC will be 50 per cent of the base price for those units. Credit transfer In line with IPART recommendations, the base price for partqualifications includes a fixed cost of $490 and a variable cost consisting of the cost of the units of competency that make up the part-qualification. Example: Part-qualification pricing A pre-vocational course has four units of competency where the units each cost $210, $240, $260 and $300. The base price for the course is: Variable cost UoC 1: $210 UoC 2: $240 UoC 3: $260 UoC 4: $300 $1,010 Credit transfer is the credit given toward a qualification for a unit of competency previously completed by an individual. No payment will be made for credit transfer. Fixed cost TOTAL PRICE $490 $1,500 NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 2

5 Loadings Loadings are applied to the base price for qualifications to meet the higher cost of disadvantaged learners. There are two types of loadings: needs and location. A needs loading relates to student characteristics and the location loading is based on where the student lives for most of the time during training. Loading categories and rates are: Category Loading Needs Aboriginal and Torres Strait Islander 15% Disability 15% Long-term unemployed 10% Location Regional 10% Remote 20% Support for thin markets A community service obligation (CSO) is a way of funding a government social obligation that is more expensive than the normal pricing arrangements. There are some markets for training where student demand in a location is so low that the cost to service them is significant. These are called thin markets. The Government will market test and apply criteria to determine which qualifications in which locations are thin markets with social obligations that warrant CSO funding. TAFE NSW and Adult and Community Education providers will be funded for community service obligations to ensure continuity of service to regional and remote areas. Only one provider will be funded per market for training and that funding will be in place for three years. A Smart and Skilled provider can claim a maximum of one needs loading and one location loading per student. Example: Loadings Student A has commenced a Certificate III with a base price of $3,000. The student fee is $240 for this student and the government subsidy is $2,760. Student A has a disability, is long-term unemployed and lives in a remote location. Student A is enrolled in their second qualification for the calendar year and so eligible for a concession fee for the course. A provider can claim one maximum need loading of 15 per cent and one location loading of 20 per cent. The provider will receive: Student fee Government subsidy Needs loading (15%) Location loading (20%) TOTAL $240 $2,760 ($3,000 x 15%) = $450 ($3,000 x 20%) = $600 $4,050 NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 3

6 Student fees and subsidies Students and government contribute toward the cost of training through fees and subsidies. Student fees will be charged on a per qualification basis rather than on a time taken basis. Standard student fees and subsidies The standard student fee and subsidy applies to students who are not doing an apprenticeship or who do not qualify for a fee concession or exemption. Students pay more for second or further qualifications If a student has already attained a first post-school Australian Qualifications Framework (AQF) qualification (or equivalent) they will pay a higher fee contribution than those who have not attained such a qualification. The average student fees and government subsidies as a percentage of the base price are as follows. Average standard student fees and subsidies as a percentage of base price, 2015 Qualification level First post-school qualification Second or further postschool qualification Fee Subsidy Fee Subsidy Foundation 10% 90% 10% 90% Certificate II-III 25% 75% 30% 70% Certificate IV 30% 70% 35% 65% Diploma/Advanced Diploma 40% 60% 45% 55% Actual student fees and subsidies will vary from the average percentage contribution. This is because adjustments are made to fees to ensure that students doing higher cost courses are not overly disadvantaged and to reduce the incentive to select cheaper courses. For Foundation Skills courses students will pay an average 10 per cent of the base price for training. The student fees will range from $220 to $320 for the full course. Foundation Skills courses will be charged at the first post-school qualification rate. Fees for year old students will also be at the first postschool qualification rate regardless of previous qualifications. Students doing higher level qualifications will contribute more to the cost of training Higher student fees will apply to Diploma and Advanced Diploma qualifications. Under Smart and Skilled, these students will be able to access Commonwealth VET FEE-HELP loans to pay for the course fee. Traineeship fees and subsidies Traineeship fees and subsidies are the same as the standard student fee for the same qualification. The only exception is that the traineeship fee is charged at the first qualification rate even though the trainee may have already completed a first post-school qualification. Apprenticeship fees and subsidies Apprentice fees will be capped Apprentice fees will be capped to minimise the cost to students and employers. The apprentice fee cap will be $2,000 for students commencing in Like traineeships, the apprentice fee is charged at the first qualification rate. Concession fees and subsidies Students who are eligible for a concession fee include: Commonwealth welfare recipients Dependant child, spouse or partner of a Commonwealth welfare recipient. NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 4

7 Concession fees are applied per qualification Concession fees are discounted fees for disadvantaged students. Concession fees apply to a qualification, rather than annual fees as previously. Concession fees are set as a flat maximum fee for the qualification level. The government subsidy to the training provider is the difference between the concession fee and the base price for the qualification. The example below shows an application of the policy. Example: Fee exemption Student B is on a disability pension Starts a Foundation Skills course and is eligible for a fee exemption. Enrols in a Certificate II and pays a concession fee of $ concession fees per qualification level 2016 Continues the Certificate II Qualification level Concession fee Foundation course $80 Certificate I $120 Certificate II $ Completes Certificate II in April. Enrols in a Certificate III and is eligible for a fee exemption. Withdraws from Certificate III Certificate III and IV $240 Diploma and Advanced Diploma No concession fee Enrols in another Certificate III and pays a concession fee. No concession fees apply to Diplomas and Advanced Diplomas. These students will have access to Commonwealth VET FEE-HELP loans. They will not have to re-pay the loan for the student fee until their income reaches a certain level as defined by the Commonwealth. Exemptions An exemption is where no fee is charged to the student. In this case, the government subsidy is 100 per cent of the base price for the qualification. Students who are eligible for an exemption include: Aboriginal and Torres Strait Islander students students with a disability one exempt course per calendar year and concession fee for any further courses up to Certificate IV in the same year. dependant child, spouse or partner of a recipient of a Disability Support Pension one exempt course per calendar year and concession fee for any further courses up to Certificate IV in the same year. Other fees and subsidies Adjustments are made to fees and subsidies for part qualifications, recognition of prior learning and credit transfer. Later in 2014, providers will have access to an online calculator through a secure portal STS Online where these fees and subsidies will be automatically calculated. Recognition of prior learning The fee and subsidy will be reduced by 50 per cent for each unit of competency granted through recognition of prior learning (RPL) as reduced training effort is required. The fixed cost of the qualification will be reduced by 50 per cent of the proportion of units of competency (UoCs) granted RPL. The variable cost will be reduced by 50 per cent of the total cost of each UoC granted RPL. Specific conditions, definitions and application of this policy are detailed in the Fee Administration section. NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 5

8 Example: Recognition of Prior Learning A Certificate III has a fixed cost of $3,000 and variable cost of $5,000 (25 UoCs at $200 each). Student A has RPL for five UoCs (20 per cent of the qualification). FULL QUALIFICATION PRICE Fixed cost Variable cost (25 $200 each) Student fee (25% of price) Government subsidy (75% of price) PRICE ADJUSTED BY RPL Fixed cost is reduced by (0.20 x 3,000) x 0.50 Variable cost is reduced by (5 x $200) x 0.50 TOTAL REDUCTION NEW QUALIFICATION PRICE Student fee (25% of price) Government subsidy (75% of price) $8,000 $3,000 $5,000 $2,000 $6,000 $300 $500 $800 $8,000 - $800 =$7,200 $1,800 $5,400 Student A will pay a fee of $1,800 and the provider will receive a subsidy of $5,400. Credit transfer The fee and subsidy will be reduced by the full cost of each unit of competency granted through credit transfer. This is because no training effort is required. The fixed cost will be reduced by the proportion of units of competency given credit transfer. The variable cost will be reduced by the total cost of each unit of competency granted credit transfer. Example: Credit transfer A Certificate III has a fixed cost of $3,000 and variable cost of $5,000 (25 UoCs at $200 each). Student A has credit transfer for five UoCs (20 per cent). FULL QUALIFICATION PRICE Fixed cost Variable cost (25 $200 each) Student fee (25% of price) Government subsidy (75% of price) Fixed cost is reduced by (0.2 x $3,000) Variable cost is reduced by 5 $200 each TOTAL REDUCTION NEW QUALIFICATION PRICE New student fee (25% of price) New Government subsidy $8,000 $3,000 $5,000 $2,000 $6,000 $600 $1,000 $1,600 $8,000 - $1,600 =$6,400 $1,600 $4,800 Student A will pay a fee of $1,600 and the provider will receive a subsidy of $4,800. Part-Qualifications Calculation of the fee for part-qualifications includes: Pre-vocational The fee will be 10 per cent of the base price as they are similar to Foundation Skills courses. The concession fee will be $80. Pre-apprenticeship or pre-traineeship The fee will be the same percentage applied to the full apprenticeship or traineeship. The concession will be the equivalent AQF level concession fee. Targeted skill areas These courses can be made up of units of competency from different training packages at different levels. As most are at Certificate IV level, the fee will be 30 per cent of the part-qualification base price for a first qualification and 35 per cent for a second or further qualification. The concession fee will be charged at the Certificate IV rate of $240. NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 6

9 For part-qualifications, if the standard fee is lower than the concession fee, the student will pay the standard fee. Example: Part-qualifications Pre-vocational A pre-vocational course is priced at $1,450: TOTAL PRICE $1,450 Transition student fees and subsidies Transition students are those who have started training under previous funding arrangements and who are continuing that training under Smart and Skilled in There are three types of transition students where transition fee and subsidy arrangements will apply: Student fee (10%) Government subsidy (90%) Concession fee Government subsidy $145 $1,305 $80 $1,370 If Student A is a standard student they will pay $145. If they are a concession student they will pay $80. student who started a course before 2014: 2014 fees apply until 31 December 2014 and pro rata Smart and Skilled fees apply from 2015 student who started a Skills List course from 1 January 2014: 2014 fees apply to 31 December 2014 and pro rata Smart and Skilled fees apply from 2015 Example: Part-qualifications Pre-apprenticeship A pre-apprenticeship is priced at $1,450 and made up of four units of competency from a Certificate III: TOTAL PRICE $1,450 student who started a non-skills List course from 1 January 2014: 2014 fees apply to 31 December and commercial fees apply from 2015 For students who started training before 1 January 2015 and are eligible to continue in 2015, subsidies will be paid at the rate covered by the original Approved Providers List contract. Where commercial fees apply in 2015, there is no subsidy to the provider. Student fee (Certificate III- 25%) Government subsidy (75%) Concession fee Government subsidy $362 $1,087 $240 $1,210 Calculation of pro rata fee For transition students, training providers will calculate the pro rata student fee using the following formula: Student B is not a concession student and will pay the standard fee of $362. Example: Part-qualifications Targeted Skill Areas A targeted skill area course is priced at $1,450: TOTAL PRICE $1,450 Total hours remaining that a student needs to complete the qualification Total nominal hours for the qualification x 2015 Standard (initial qualification) fee OR 2015 Apprenticeship fee OR 2015 Concession fee Student fee (first qual - 30%) Government subsidy (70%) Student fee (2 nd /further qual - 35%) Government subsidy (65%) Concession fee Government subsidy $435 $1,015 $507 $942 $240 $1,210 Student C is not a concession student and already has Certificate IV. Student C will pay a fee of $507. NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 7

10 Example: Pro rata fees for transition students Student D started a Skills List Certificate II in 2014 and paid a fee of $534. Student A has completed 220 hours out of 400 hours with 180 hours or 45 per cent left to complete. Under Smart and Skilled the qualification is priced at $4,000 with a student fee of $1,000 and government subsidy of $3,000. The remaining fee to be paid by Student A is $450 (45 per cent of the new student fee) QUALIFICATION PRICE Student fee Government subsidy Remaining hours / total nominal hours = 180/400 Student fee TRANSITION STUDENT FEE $4,000 $1,000 $3,000 45% X $1,000 $450 Student D will pay a fee of $450 to complete their course Transition Diploma/Advanced Diploma concessions As concessions will not be available for Diploma and Advanced Diploma students from 2015, transition arrangements will be needed for concession students who commenced prior to 1 July 2014, who did not know that their concession eligibility could be impacted. Students who commenced prior to 1 July 2014, will pay a proportional transition fee in 2015 based on the recommended IPART concession fee of $400. Example: Pro rata fee for a Diploma concession student starting before 1 July 2014 Student A started a Skills List Diploma in February 2014 and was eligible for a concession. By 1 January 2015 they had completed 1 year of a 2 year course. For students who commenced before 1 July 2014, a concession fee amount of $400 will be used to calculate the remaining concession fee to be paid. For Student A the provider calculated that 400 hours of the 800 hour course remain. Using the formula on page 7 of this Guide: Student concession fee (for Diploma concession students who commenced before 1 July 2014) Remaining hours / total nominal hours = 400/800 Concession student fee TRANSITION STUDENT FEE $400 50% X $400 $200 Student A will pay a concession fee of $200 to complete their course If an equivalent student commenced training from 1 July 2014 they will not be eligible for a concession in calculating their transition fee in This is because the prices, fees and subsidies for Smart and Skilled will have been released and the student can make an informed choice about study. Continuing students from 2015 Students who commence training in 2015 and continue training beyond that period will continue with the fee calculated for their course when they commenced. This principle applies to later years. In other words, a student who commences in 2016 or later will pay the fees applicable at that time. NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 8

11 Price and fee administration Price administration Indexation of base prices The base prices will be reviewed annually. Prices will apply from 1 January each year and will be published in October of the preceding year. The reviewed prices, fees and subsidies will apply only to commencing students in that year. Revision to training packages The base price for a qualification will be adjusted if there is a material change to a training package that impacts on the typical combination of units of competency for the qualification. This will occur as part of the annual adjustment to prices. Training provider responsibility The onus of proof of student eligibility for Smart and Skilled, for concessions and exemptions and provider eligibility for loadings will be the responsibility of the provider and will be auditable. Training provider contracts will give details. Proof of eligibility for payment of subsidy Proof of eligibility for loadings Providers will need to prove eligibility for loadings by sighting evidence for: Aboriginal and Torres Strait Islander students eligible students will be identified through descent, self-identification and community acceptance. Students will declare their Aboriginal status and provide documentary evidence if required. Disability eligible students on a Disability Support Pension will need to provide evidence including: letter from the Department of Human Services (Centrelink) confirming receipt of the Disability Support Pension, or current Disability Pensioner Concession Card, or current Department of Human Services (Centrelink) Income Statement. Documentary evidence of support needs from an appropriate specialist/support professional, can include a letter or statement from: a medical practitioner, or To be eligible for subsidised training a student must be: an Australian citizen, permanent resident or humanitarian visa holder, or New Zealand citizen, and aged 15 years or older, and no longer at school, and living or working in NSW. Any student registered as a NSW apprentice or new entrant trainee will also be eligible for subsidised Smart and Skilled training. Students with Certificate IV or higher will not be eligible for subsidised training at Certificate lll or below. Training providers will need to sight appropriate evidence of eligibility. an appropriate government agency or TAFE NSW Teacher/Consultant for students with a disability, school counsellor or special education coordinator, Centrelink, Disability Service Provider, Job Capacity Assessor, or a specialist allied health professional (including rehabilitation counsellor, psychologist, speech pathologist, occupational therapist) Long term unemployed eligible students are those who are unemployed for 52 weeks or longer. These students will be identified through evidence from a Job Services Australia provider. Regional and Remote eligibility will be determined on the student s address where they are living for NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 9

12 the majority of time they are training (at least 4 days per week for the majority of weeks while completing training). Eligibility for a regional or remote loading will be based on Accessibility/Remoteness Index of Australia (ARIA) 1 categories. Regional and remote loadings will not be available for those undertaking study solely through an online delivery mode or by correspondence. For interstate students who work in New South Wales, eligibility for loadings will be determined by the ARIA category of their residential address. RTO payment schedule Subsidy payments will be staged to broadly align with the incurrence of costs for an RTO: Second or further qualification: This fee applies where a student has attained a post-school qualification. It includes vocational and higher education qualifications achieved in Australia or overseas. The second or further qualification fee is higher as the individual has already benefited from training. Proof of existing qualifications will initially be determined by student declaration sighted by the training provider. Smart and Skilled data and data from the Student Identifier, planned for implementation from 1 January 2015, may also be used as evidence of qualification attainment. Proof of eligibility for concessions and exemptions Proof of eligibility for concessions and exemptions is: Certificates l, ll, lll, lv: 3 instalments Diploma and Advanced Diploma: 5 instalments Commonwealth welfare benefit recipients and their dependent child, spouse or partners evidence can be in the form of: Apprenticeships: 7 instalments. The proportion of the payment will be based on the units of competency completed, using the student s training program. letter from the Department of Human Services (Centrelink) confirming receipt of the Disability Support Pension, or current Pensioner Concession Card, or Fee administration First and second or further qualifications Students not eligible for an exemption or concession will be charged a standard student fee. There are two types of standard fee (first qualification and second or further qualification) for each qualification on the Skills List. The standard fee charged will be based on: First qualification: This fee applies where a student has not attained any post-school qualifications. It includes vocational and higher education qualifications achieved in Australia or overseas. If a student has a previous qualification from school, or before turning the age of 17, they will be deemed to have no previous qualifications. The first qualification fee will be charged to eligible students in Foundation Skills courses and traineeships. current Department of Human Services (Centrelink) Income Statement. Dependants must provide evidence that Centrelink or other Benefit provider accepts the child/spouse/partner as a dependant. Aboriginal and Torres Strait Islander students same proof as per loadings. Disability for students with disabilities the same proof as per loadings applies. For dependants of students with disabilities the same proof as for welfare benefit recipients applies. 1 ARIA measures road distances between populated localities and service centres to generate a remoteness score. It is used by the Australian Bureau of Statistics (ABS) as the measure of remoteness. NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 10

13 Transferring students There are circumstances where a student may transfer to another Smart and Skilled provider. Where the student transfers of their own accord, the standard credit transfer rules will apply to calculate the student s fee and subsidy with the new Smart and Skilled provider. Where the student has to transfer because the provider has closed down or had their contract cancelled, the total student fee charged by the two providers cannot exceed the original student fee. To ensure this the student will need to obtain from the original provider a Statement of Fees paid and refunded and a document listing units of competency, completed and not completed. These documents must be given to the new provider. In this case the Department will pay any fee gap to the new provider. Fee protection Smart and Skilled providers must meet one of the following Standards for National VET Regulator (NVR) RTOs for the protection of student fees: Levying of fees to the student Providers can exercise their discretion in determining payment arrangements for student fees. They must publish information and inform students of these arrangements prior to enrolling in a course. Providers must have appropriate arrangements to refund unused fees where a student withdraws from training, the provider ceases to trade or the provider no longer is approved to deliver training under Smart and Skilled. Providers must comply with one of the Standards for NVR RTOs for the protection of student fees and supply each student with a refund policy prior to enrolment. Additional costs to students There may be some instances of costs to students over and above the student fee. These costs include: essential items that become student property an optional charge for an item that is not essential for the student to complete the training RTO is a state, territory or federal government agency RTO is a member of an approved Tuition Assurance Scheme (TAS) an optional charge for an alternative item or service that is an essential component of the training, but is otherwise made readily available at no additional fee by the provider (eg hardcopy of a textbook that is an online resource) RTO holds a non-conditional financial guarantee from a bank operating in Australia for no less than the full amount of funds held which are prepayments by students RTO does not accept payment of more than $1000 from each individual student prior to the commencement of the qualification/course. Following qualification/course commencement, where the RTO requires payment of additional fees in advance from the student, at any given time the total amount required to be paid for training yet to be delivered to the student does not exceed $1,500. RTO has alternative fee protection measures of equal rigour approved by ASQA. food, transport and accommodation costs associated with field trips for training. Providers must publish information on their website about additional costs that a student will incur. Smart and Skilled provider calculator Later in 2014, providers will have access to an online calculator through a secure portal STS Online where they will be able to confirm student eligibility, fees, subsidies and loadings. Information entered into the calculator will be captured and stored by the Department to assist in establishing early financial commitments and budget management. This will allow providers to establish their cash flow. Smart and Skilled student course finder and fee estimator Later in 2014, a calculator for individuals will be available on the Smart and Skilled Course Finder so they can check eligibility and estimate the fee for a course. NSW DEPARTMENT OF EDUCATION AND COMMUNITIES 11

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