Information for Providers
Key features of VET Funding Contracts
VET Funding Contracts
The Government has issued five types of VET Funding Contract for registered training
organisations to deliver training under the Victorian Training Guarantee:

2014-16 VET Funding Contract

2014-16 VET Funding Contract (TAFE)

2014-16 VET Funding Contract (Dual Sector)

2014 VET Funding Contract

2014 VET Funding Contract (Non-Victorian based RTO delivering to a National
Enterprise)
The purpose of this document is to provide an overview of some of the common key features
of the VET Funding Contracts. A snapshot of these items is at the end of this document.
Key Features
Foundation Skills
A Foundation Skills Approved Provider List is being introduced, to come into effect during the
course of 2014. Further information on the process for providers to apply to be on the
Approved Provider List will be issued by the Department shortly. Providers with relevant
scope of registration and funded scope will be able to deliver Foundation Skills courses whilst
the process is being conducted.
To ensure that the Pre-Training Review process is being used to direct students into the best
type of training for them, providers will now be required to document and retain auditable
evidence that demonstrates how it determined which qualifications the student is enrolled in
and why this was the most appropriate training option for that student.
For Foundation Skills training, these changes will mean that students are only enrolled in
courses that are relevant and provide the additional basic skills they need to undertake further
study or do their jobs well.
Eligibility of students enrolled in school for the Victorian Training Guarantee
The Government is placing renewed emphasis on school students accessing vocational
education and training that is undertaken as part of the education program approved by the
school through the VET in Schools program and funding for school-based apprentices and
trainees.
Key features of VET Funding Contracts - 15 November 2013
As a consequence, from 1 January 2014 funding through the Victorian Training Guarantee
(VTG) will not be available for enrolments by school students outside the program of study
approved by their school. This includes students enrolled in any government,
non-government, independent, Catholic or home school. The availability of funding under the
VTG for school-based apprentices and trainees will not change.
Regional Loading increased
Recognising the importance of training delivery in regional areas, the regional loading has
been increased from 5 per cent to 10 per cent for all new and continuing commencements in
2014. The loading continues to apply at the unit level to training reported as being delivered in
designated postcodes set out in the Regional Postcodes Report.
Fee Concession Contribution increased
From 1 January 2014, Government will increase its contribution to a provider’s forgone fee
revenue for concession students, which will mean in most cases there will be no gap for
providers.
The Government is increasing the contribution it pays providers towards revenue forgone
from 90 per cent to 100 per cent (up to a maximum value). Concession contributions
continue to be calculated on the basis of reported hourly student tuition fees, up to a
maximum concession contribution rate for each course. For courses where this maximum rate
was previously lower than $2 per hour, it has now been increased to $2 per hour.
Course subsidies
The Government, including the Market Monitoring Unit, is continuing to monitor the training
market and has made changes to subsidies in response to behaviours in the market.
Course subsidies for 2014 have been confirmed by the Government and have been published
on the ‘2014 Funded Courses Report’ in the Documents section of SVTS. These course
subsidies will apply from 1 January 2014 for both new commencements in 2014 and students
continuing into 2014 from previous years.
Subcontracting
Subcontracting and third party arrangements involving the delivery of training and
assessment continue to be a point of focus for the Department, regulators and the National
Skills Standards Council. Risks to quality and compliance have been identified at a State and
national level where training and assessment is delivered by a non-registered training
organisation.
In order to continue to drive quality professional and organisational practice in the government
subsidised training market, from 2014 providers will be required to seek the prior written
approval of the Department before subcontracting training and assessment (as distinct from
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Key features of VET Funding Contracts - 15 November 2013
administrative or operational matters) to any third party that is not a contracted RTO, including
RTO and non-RTO entities.
Introduction of monetary amounts
You will note that the Contract includes reference to the Department’s power to require
payment of a ‘monetary amount’ in relation to Evidence of Participation, Evidence of Eligibility
and Evidence of Concession audit outcomes as set out in the Program Specifications.
Amendments to the Education and Training Reform Act 2006 made late last year conferred a
broad power on the Department to require the payment of monetary amounts in the event of
material breach of the Contract.
In considering the appropriate application of this power the Department has taken a
conservative, proportional and considered approach. The requirement to pay a monetary
amount will be exercised in the context of the Victorian Training Guarantee Compliance
Framework as one of a range of compliance and enforcement activities, taking into
consideration the nature and the scale of the identified non-compliance.
Please refer to the fact sheet ‘Monetary Amounts for Contract Breaches’, published in the
Documents section of SVTS, for further information on the Department’s approach to applying
and calculating monetary amounts.
Reduced reporting burden
Recognising the administrative effort involved in meeting hardwired reporting requirements
under the current Agreement, the 2014-16 VET Funding Contract has rebalanced the
reporting burden. In particular, you will note that providers are no longer required to notify the
Department of any Brokering Arrangements as they occur, but may be asked to provide this
information on written request by the Department.
Tuition Fees
Providers are no longer required to calculate and publish tuition fees at an hourly rate, for
hours undertaken in the calendar year. Instead, you are now able to calculate tuition fees
according to the needs of your organisation. Tuition fees for each course must be published in
a prominent place on your website.
Please note, for the purpose of reporting tuition fees to the Department through SVTS,
providers must continue to report the tuition fee expressed as an hourly rate.
Who can I contact if I require further information?
If you have a question regarding your VET Funding Contract please submit it to the
Department using the Enquiry function of SVTS under the appropriate category.
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Key features of VET Funding Contracts - 15 November 2013
Snapshot of key features of VET Funding Contracts
Feature
Key points
Clause ref
Funded Scope
Updated definition, Department continues to reserve right to
determine an RTO’s funded scope.
Terms &
Conditions
Clause 1
Foundation
Skills
Approved
Provider List
Must be an Approved Foundation Skills Provider to deliver
foundation skills courses under government subsidy effective from
date of notification by Department.
Terms &
Conditions
Clause 4
RTOs must seek the prior written approval of the Department before
subcontracting training and assessment (as distinct from
administrative or operational matters) to any third party that is not a
contracted RTO.
Terms &
Conditions
Clause 5
Subcontracting
Reporting Fee
for Service
training
activity
The COAG Standing Council on Tertiary Education, Skills, and
Employment has mandated that all RTOs must report Total VET
Activity (including fee for service training delivery) from
1 January 2014.
Variation of
Funds
Department can vary Funds with 10 business days’ notice.
Department may require payment of a ‘monetary amount’ in
relation to certain contract breaches.
Introduction of
monetary
amounts
Publication of
registration
audit report
Please refer to the fact sheet ‘Monetary Amounts for Contract
Breaches’ published in the Documents section of SVTS for further
information on the Department’s approach to applying and
calculating monetary amounts.
No longer be required to publish registration audit report on
website. Instead, RTOs must publish a summary of this information
as specified in the Contract.
Eligibility for
VTG
School students not eligible for the VTG outside of school curriculum
i.e. not eligible except as a School Based Apprentice/Trainee.
Pre-Training
Review
Must retain evidence of Pre-Training Review.
Training Plans
Clarification that the Training Plan, RTO endorsement and student
endorsement can be in electronic format.
Terms &
Conditions
Clause 6
Program
Specifications
Clause 11
Terms &
Conditions
Clause 7.2c
Terms &
Conditions
Clause 16.2(e)
Program
Specifications
Clause 13
Program
Specifications
Clause 1.2
Program
Specifications
Clause 2.1
Program
Specifications
Clause 4.5
Program
Specifications
Clauses 6.4
and 6.5
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Key features of VET Funding Contracts - 15 November 2013
Snapshot of key features of VET Funding Contracts
Feature
Reporting of
trainer
qualifications
Third party
arrangements
Regional
Loading
Concession
contribution
Tuition fees
Key points
Must submit information on the number of trainers and
assessors with Diploma level or above qualifications related to
teaching and training, and the title of the highest qualification
held and indicate whether the trainer or assessor is involved in
the delivery of foundation skills.
No longer required to notify the Department of any Brokering
Arrangements as they occur.
May be required to provide details of all third party arrangements
for the delivery of Training Services on the RTO’s behalf. This may
include but is not limited to: determination of eligibility and
enrolment processes, Pre-Training Reviews, marketing, and
Brokering Services.
Increased from 5 per cent to 10 per cent for new and continuing
students.
Increased from 90 per cent contribution toward revenue forgone
to 100 per cent contribution up to a maximum value.
For courses where the maximum contribution value was
previously lower than $2 per hour, it has now been increased to
$2 per hour.
No longer required to charge fees on an hourly basis.
No longer required to publish fees at an hourly rate but must
publish fees in a prominent place on the website.
Now able to charge fees across calendar years.
Must, however, continue to report tuition fee expressed as an
hourly rate through SVTS.
Clause ref
Program
Specifications
Clause 11.3
Program
Specifications
Clause 11.7
Program
specifications
Clause 12.6(b)
Program
Specifications
Clause 12.12
2014
Guidelines
about Fees
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