Funding of Independent Schools
Parents and the Australian and Northern Territory Governments share the financial responsibility for educating children in Independent schools in the Northern Territory.
Non-Government School Funding Changes
In September 2018, the Australian Government announced – in response to a review by the National School Resourcing Board – that it would update a key element of the formula used to determine a non-state school's parent/guardians and community's capacity to contribute (CTC) to their child’s education.
The change involves moving from using a socio-economic status (SES) score based on the characteristics of the people in the area where a student lived to a direct measure of income (DMI) based on the median income of parents/guardians to calculate their CTC.
The difference in methodology means that for most schools, there will be a change in their CTC scores between the two methodologies. Some schools will see a resulting increase in funding, some schools will have the same CTC score and therefore no change in funding, and some schools will see a reduction in funding.
The DMI does not apply to Special, Special Assistance or Majority Indigenous Schools which are funded at the maximum Commonwealth funding rate.
Timeline for Implementation
The DMI will replace the current SES measure in the calculation of Australian Government funding for all non-state schools from 2022.
However, it will apply for some non-state schools from 2020 where it results in a better financial outcome than using one of two other measures, 2011 SES or 2016 SES.
The Department of Education, Training and Skills has completed these calculations and determined the best outcome for individual schools.
The Department sent letters to all Queensland independent schools in February 2020 outlining each school’s new DMI score, which of the three measures their funding will be based on in 2020 and their estimated per student recurrent funding entitlements to 2030.
The Department of Education has prepared a range of fact sheets for schools explaining the new DMI.
Independent Schools Council of Australia (ISCA) has prepared a fact sheet on Direct Measure of Income Methodology
The Federal Minister for Education, the Hon Dan Tehan, introduced the Australian Education Amendment (Direct Measure of Income) Bill 2020 into the House of Representatives on 26 February 2020 to give effect to the new DMI.
The Minister provided a summary of the changes, background to the changes and the Government’s intention to continue consulting with schools and the sector in his Second Reading speech.
The Bill has been referred to the Senate Education and Employment Legislation Committee for inquiry.
The committee is accepting submissions on the Bill until 12 March 2020.
The committee is due to report to Parliament on 23 March 2020.