Grants to Non-Government Schools

Tabled: 9 March 2016

Appendix A. Overview of DET Financial Assistance Model

The Financial Assistance Model

The Financial Assistance Model (FAM) is the Department of Education & Training's (DET) model for distributing state recurrent grants. The FAM replaced the former Education Resource Index funding model in 2006. Funding for each school is calculated under two components (core funding and equity funding), however, the total funding provided to a school under the model is untied recurrent funding. This allows schools the flexibility to determine how the funds will be spent in order to best meet the needs of the students.

The core funding and equity funding components are divided into various funding elements. FAM is not the major contributor of funds to non-government schools, but rather it is intended to target particular needs, based on the number of enrolments. Nearly 60 per cent of FAM funding is focused on equity and need. All elements of FAM, except for the students with disabilities (SWD) element, can be used for any general recurrent funding purpose. While the SWD element of FAM must be used to support students with disabilities, the funding does not need to be linked or allocated to individual students.

Figure A1
The Financial Assistance Model

Image A1 of the Financial Assistance Model illustrating how money is allocated

Source: Victorian Auditor-General's Office based on information from the Department of Education & Training.

The specific rates applied to each element of the FAM change from year to year, and depend on the total number of students in non-government schools.

Core funding component

The core funding component is made up of base core funding and wealth modified core funding. Schools receive core funding for every eligible student enrolled at the school.

Base core funding

Base rates of funding per student have been established. These rates are weighted for both a primary/secondary split and for the stage of schooling—which considers the relative average recurrent cost of educating a student in each year level in a Victorian government school. The 2015 funding rate ranges from $397.44 per student for students in years 3, 4, 5 and 6 and ungraded primary students to $619.40 per student for all levels of secondary school.

Wealth modified core funding

Schools receive funding under the wealth modified core element according to the private recurrent income that the school receives. The calculation of private recurrent income is based on information provided by schools to the Australian Department of Education and Training in the annual Financial Questionnaire.

Schools receive a block allocation of funding under this element, rather than a per student rate.

Equity funding component

Equity funding comprises five elements that have been identified by DET as a measure of educational disadvantage:

  • SWD funding
  • Aboriginal and Torres Strait Islander funding
  • Rurality and isolation funding
  • Student family background 1 funding
  • Student family background 2 funding.
Students with disability funding

Currently, the majority of SWD funding is measured by the number of students with an Australian Government-defined disability, as identified by the school on the Australian Government Census.

A single per capita rate has been established for each student with a disability, regardless of the level of severity of their disability. The funding rate for 2015 is $2 119.07 per eligible student.

The Victorian Government has also provided additional funding since 2010, to provide more targeted support for students with a disability. This funding was intended to be dependent on the establishment of consistent measures of disability severity across the non-government school sector. However, agreement has yet to be reached and funding has been distributed within each sector according to that sector's agreed definitions of disability.

Aboriginal and Torres Strait Islander funding

This funding is allocated based on the number of students from an Aboriginal or Torres Strait Islander background, as identified on the Australian Government Census. The 2015 funding rates were $697.00 per eligible primary student and $1 045.00 per eligible secondary student.

Rurality and isolation funding

Rurality and isolation funding is designed to recognise the additional costs of education provision in geographically remote schools.

Each school campus is allocated a Rurality Location Index score based on its distance from Melbourne, its distance from the nearest provincial centre with a population greater than 20 000, and its distance from the nearest 'large school'. School campuses in the Melbourne metropolitan area automatically receive an index score of 0.00, while the most remote school in Victoria receives a score of 1.00.

Each school's funding is calculated by multiplying the base Rurality and Isolation Index rate of funding by each campus' Rurality Location Index score, by the number of students at the campus and by a primary/secondary weighting, and then calculating the sum of the campus allocations. The 2015 funding rates were $176.90 per primary student and $260.04 per secondary student.

Student family background 1 funding

Prior to 2014, funding was provided to schools based on the number of students who receive Education Management Allowance (EMA) funding. The EMA was provided for parents who held a Health Care Card, Pensioner Concession Card, Veterans' Affairs Gold Card, or who were foster parents.

From 2015, DET no longer collects EMA data. Consequently, the 2015 student family background 1 element of the FAM will be based on the proportion of students at each school who were eligible to receive EMA funding in 2014.

Funding is calculated by multiplying the base student family background rate of funding by the number of eligible students at the school, with a primary/secondary weighting of 1.00/1.47. In 2015, the rates were $5 723.03 per primary student and $8 412.85 per secondary student.

This component accounts for a significant portion of the FAM allocation.

Student family background 2 funding

The Student Family Occupation (SFO) measure is calculated based on parental occupation information, as collected as part of the Student Background Characteristics data. Schools receive funding according to their SFO density score, which calculates the proportion of parents at the school in each occupation category, with each occupation category being weighted for relative education need. The equity/needs funding component aims to break the patterns of inequality in student outcomes by targeting funds at schools with a higher density of students from low socio-economic backgrounds, who are most at risk of not achieving satisfactory outcomes in literacy and numeracy. The guidelines highlight that student family background has a significant impact on student achievement. This measurement, used to assess student need, is based upon parental occupation and has become an increasingly important component of funding.

Figure A2
Occupational category weightings

Occupation category


Senior management and qualified professionals


Other business managers and associate professionals


Tradespeople, clerks and skilled office, sales and service staff


Machine operators, hospitality staff, assistants, labourers and related workers


Not in paid work in the last 12 months


Not stated or unknown


Source: Independent Schools Victoria, Guide to Australian and Victorian Government Funding 2015.

Funding is calculated by multiplying the base SFO rate of funding by a school's SFO density score and the number of students at the school. There is no primary/secondary weighting applied to this element of funding. For small schools, a minimum funding amount of $5 500 is applied. In 2015, the initial base SFO rate was $418.86 per student.

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