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Funding for Independent Schools from 2018

From 2018 the Commonwealth funding arrangements for all schools will change.

In 2017, legislation was introduced which changed school funding for all schools from 2018. Under the previous arrangements, all schools were moving towards their Schooling Resource Standard (SRS) funding entitlement over time. Originally envisaged as a total public funding model, the share of public funding being provided by the Commonwealth was based on historical funding patterns. This meant that schools serving the same type of students received different funding from the Commonwealth depending on where they were located.

The new funding model aims to transition all schools to the same amount of Commonwealth funding for the same students.

For government schools, the Commonwealth share has been set at 20% of SRS and for non-government schools the Commonwealth share has been set at 80% of SRS.

Independent schools funded below 80% Commonwealth share will transition up to 80% of SRS over six years. Each year they will receive 16.7% of the ‘gap’ between the current Commonwealth share of their SRS entitlement and 80% of their SRS entitlement.

Independent schools which are above 80% Commonwealth share will transition down to 80% over ten years. Unlike the current funding model which has no school losing funding in real terms, under this model a small number of Independent schools currently receiving more than of 80% of their public funding from the Commonwealth will lose funding in real terms over the course of their transition. Additionally, several hundred Independent schools will have their funding reduced under the new arrangements.

The Australian Government has provided a Transition Adjustment Fund to assist these schools maintain their financial viability over the course of the transition.

The calculation of each schools’ SRS funding entitlement will remain very similar to the previous funding model with some changes which are outlined below.

Changes from the current model

Rebasing of the SRS

From 2018 the SRS funding model includes recalculated SRS amounts for primary and secondary. The SRS amounts were recalculated using the same methodology that was used to calculate the original SRS amounts and are intended to reflect the changes to the costs of schooling since the original calculation. The methodology does not provide an average cost of schooling, rather it is intended to calculate the cost of the provision of effective and efficient schooling in high achieving schools, identified by their performance in the National Assessment Program – Literacy and Numeracy (NAPLAN) and excluding any measure of disadvantage.

The recalculation has resulted in a primary SRS amount for 2018 of $10,953, a 6.2% increase from 2017, and a secondary amount of $13,764, a 1.5% increase from 2017. This will have a significant effect on the relativities on the funding schools receive for primary students and the funding schools receive for secondary students between 2017 and 2018.

Indexation

Between 2014 and 2017 the SRS funding model had three different indexation rates; 3% for schools ‘above SRS’, 3.6% for schools ‘on SRS’ and 4.7% for schools ‘below SRS’. From 2018 there is only one indexation rate for the SRS – 3.56% from 2018 to 2020 and then from 2021 indexation will move to a floating measure comprised of 75% Wage Price Index and 25% Consumer Price Index with a floor of 3%.

Capacity to Contribute settings

The Capacity to Contribute (CTC) settings for the SRS funding model are used to determine by how much the base funding component of the model is discounted based on non-government schools’ communities’ capacity to contribute to the costs of education. Currently these settings are based on the same measure of socio-economic status (SES) used for the previous SES funding model.

When the SRS Funding model was first introduced in 2014, it included a ‘curve’ to the primary CTC line. The curve increased the per student funding of primary students at schools with an SES score between SES 108 and 122. These students received a per capita amount for primary students which was higher than the per capita amount for secondary students.

From 2018, the ‘curve’ has been adjusted so that at no point does a primary student receive more funding than a secondary student. This is more reflective of actual primary and secondary school costs.

New ‘Capacity to Contribute’ settings (based on re-based 2018 SRS)

 

 

 

 

 

The SES methodology being used to calculate CTC is currently being reviewed by the newly formed National School Resourcing Board.

Removal of Student Weighted Average SES

Between 2014 and 2017 the SRS funding model allowed school systems to utilise a student weighted average Socio-Economic Status (SES) score for the entire system. This means that rather than each school’s CTC being measured on their own SES score, the SES score for the system was set at the student-weighted average SES score and all schools have the same CTC percentage. Where this was not financially beneficial to systems, they could choose to stay with schools’ individual SES scores being used to calculate CTC for the system.

The Australian Government agreed to retain the Student Weighted Average SES in 2018 while the SES methodology is being reviewed.

 Students with Disability Loading Settings

Significant changes have been made to the Student with Disability loading settings with the introduction of a differentiated loading based on the Nationally Consistent Collection of Data on School Students with Disability (NCCD) data collection.

The loading settings for students with disability from 2018 are now significantly different to the settings used between 2014 to 2017 and all the available modelling regarding the proposed changes indicates that they can have a significant impact on individual Independent schools’ funding entitlements depending on each school’s enrolments

Comparison current and new SWD loadings

Current loadingsProposed differentiated loadings
186 per cent for students with a disability
attending a mainstream school
Primary
• Supplementary 42 per cent
• Substantial 146 per cent
• Extensive 312 per cent
223 per cent for students with a disability
attending a special school
Secondary
• Supplementary 33 per cent
• Substantial 116 per cent
• Extensive 248 per cent

The primary percentages are higher than the secondary to bring the total amounts into alignment when multiplied by the primary and secondary SRS amounts i.e. the loading amounts will be similar regardless of whether the student is a primary student or a secondary student.

The NCCD data collection is a relatively new collection and has not previously been used for funding. From 2018 the Australian Government has incorporated the NCCD data collection for non-government schools into the Non-Government Schools Census and the NCCD will be subject to the same audit processes.

Comparison current and new SWD loadings

Another important element of the funding arrangements from 2018 will be the requirement on State-Territory governments to provide a set share of SRS funding for both government and non-government schools. Notionally the share is 80% of SRS for government schools and 20% of SRS for non-government schools. However the final shares and transition paths are subject to negotiation between the Australian Government and state and territory governments.

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