The EQI and ISO: Examples of transition funding

Transition funding 

The school decile system has been replaced by the Equity Index. This change was effective from 1 January 2023 and has changed the way some funding is distributed to schools and kura. Alongside this change there was also a new funding curve and new funding rates that will be applied to: 

• Equity Funding (EQI funding) - a new component replacing the Targeted Funding for Educational Achievement (TFEA) and Targeted At Risk Grant (TARG).
• Support for Inclusion Funding (SIF) – previously known as Special Education Grant (SEG).
• Careers Information Grant (CIG). 
• Targeted Funding for Isolation (TFI).

This means that schools and kura may now receive a different level of funding than they would have under the decile system. For those schools who receive less funding, transition support will be provided to help manage the impact of these changes.   

Transition funding approach  

Transition funding will support schools and kura experiencing reductions in their operational funding due to the implementation of the Equity Index. 

• For 2023, no schools or kura will lose funding as a result of these changes.  
• For 2024, no school or kura will experience a reduction in their operational funding greater than 5% of their 2022 operational funding. Transition funding will be provided in the following years, but this will gradually reduce over time until the new funding entitlement is reached. 

The transition approach is the same for all schools and kura who will receive less funding under the Equity Index. Transition funding will be fixed for the duration of the transition period. This is to provide certainty of funding for these schools and kura.  

How transition funding is calculated

To determine whether your school or kura is eligible for transition funding, first we estimated, and compared, the 2022 and 2023 total operational funding for your school or kura. If your estimated 2023 operational funding is less than 2022, you are eligible for transition funding.  

Your 2023 operational funding is estimated using the new EQI funding and Isolation funding rates and a first draft of your 2023 provisional roll. The estimated 2023 operational funding also includes the annual operational grant increase of 2.75% for each funding component. If your estimated 2023 operational funding is greater than 2022 you are not eligible for transition funding. 

Example

Determining eligibility for transition funding  

School A’s 2022 estimated operational funding is $2,157,661.  In 2023, it is estimated that they will receive $1,971,905. As a result, School A will receive $185,756 less funding in 2023 due to the implementation of the Equity Index. This means they are eligible for transition support.   

Note

For those schools and kura who are paid quarterly, your full 2022 operational grant funding was not available at the time the transition arrangements were finalised. We have estimated your funding based on your Quarter 1 – 3 instalments. 

These calculations may differ to the final amount of operational funding you will receive in 2022 and 2023.  

Calculating how much transition support you will receive each year 

Eligible schools and kura will receive a fixed amount transition funding to provide certainty.  

• For 2023, no schools or kura will lose funding as a result of the change to the Equity Index.  
• For 2024, no school or kura will experience a reduction in their operational funding greater than 5% of their 2022 operational funding. Transition funding will be provided in the following years, but this will gradually reduce over time until the new funding entitlement is reached. 

Example

Calculating your transition support payments  

School A above is eligible for transition support because their total operational funding is estimated to be less in 2023 than it was in 2022.  

To calculate the amount of transition support funding your school or kura will receive, we use the estimated reduction in funding as a percentage of your total 2022 operational funding.    

 This percentage determines how many years you will receive transition funding for.  

When calculating the annual transition funding: 

• You will receive the total difference in 2023. This is the difference between your total 2022 operational funding and your estimated total 2023 operational funding. 
• For subsequent years – the transition support you will reduce by 5% each year. This means that if your remaining movement is greater than 5% then you will receive transition support in that year.  
• If your remaining movement is less than 5%, you will not receive further transition support funding.  
• The transition funding is a fixed amount and is calculated at a point in time.   

For school A this means:  

Last reviewed: 13 March 2024 Has this been useful? Give us your feedback