House of Representatives

Explanatory Memorandum

Circulated By Authority of the Minister for Tertiary Education, Skills, Jobs and Workplace Relations

Schedule 1 - Amendments relating to demand driven funding system

Summary

Schedule 1 of the Bill gives effect to the Australian Government's announcement that it would implement a demand driven funding system for undergraduate student places at providers listed in Table A of HESA. The majority of these providers are public universities.

Schedule 1 amends the Commonwealth Grant Scheme provisions in Part 2-2 of HESA and makes amendments to other provisions of HESA to remove the annual caps on Commonwealth Grant Scheme funding and to change the way in which higher education providers will be eligible for funding under Part 2-2 of HESA.

For Table A providers there will be a distinction between designated courses of study and non-designated courses of study. The Minister will not allocate places for non-designated courses of study, but may do so for designated courses of study. This will affect the amount of Commonwealth Grant Scheme funding that Table A providers will be eligible to receive. Designated courses of study will be non-research postgraduate courses of study, courses of study in medicine and courses of study that the Minister specifies in a legislative instrument.

The Minister's ability to specify a course of study as a designated course of study allows the Minister to allocate student places for these courses if required. For example, it may become apparent that there is insufficient availability of the clinical placements necessary to ensure an appropriate level of skill among people graduating in a particular profession. Any specification of such courses by the Minister would be subject to Parliamentary scrutiny.

The requirement under section 30-1 of HESA for providers to enter into a funding agreement with the Commonwealth under section 30-25 of HESA in order to be eligible to receive Commonwealth Grant Scheme funding will not change, but some of the provisions of HESA relating to agreements are being amended.

There will now be the option for funding agreements to specify a maximum basic grant amount payable to a provider for a grant year for both designated and non-designated courses of study. The maximum basic grant amount for designated courses of study for a Table A provider must not be less than the basic grant amount worked out based on the provider's allocated places in those designated courses of study. The maximum basic grant amount for non-designated courses of study must not be less than the maximum basic grant amount specified in the provider's funding agreement for the previous year or, if there was no amount specified, must not be less than the amount worked out under new paragraph 33-5(5)(a) for such courses for the previous year.

Funding agreements for non-Table A providers may specify a maximum basic grant amount for a grant year, which must not be less than the amount worked under new subsection 33-5(7).

Higher education providers eligible for a Commonwealth Grant Scheme grant will no longer be paid on the basis of their allocated Commonwealth supported student places which they provide, subject to any specified funding limits.

Background

Currently, HESA distinguishes between 'Commonwealth supported students' and other types of students who are mainly full fee-paying students with private higher education providers or postgraduate students at public universities. The Commonwealth pays its contribution to a higher education provider for a Commonwealth supported student through the Commonwealth Grant Scheme under Part 2-2 of HESA. Commonwealth supported students also make a contribution and may be eligible for a loan through HECS-HELP to assist them to pay their student contribution amount.

Currently, the majority of Commonwealth supported student places are allocated to Table A providers, most of which are public universities (see section 16-15 of HESA). Commonwealth supported places may only be allocated to non-Table A providers where those providers are specified in the Commonwealth Grant Scheme Guidelines made under section 238-10 of HESA as being eligible to receive such grants and the allocation is in respect of national priorities (see sections 30-10 and 30-20). There are limited numbers of such Commonwealth supported places allocated to non-Table A providers.

There is currently a maximum amount of Commonwealth Grant Scheme expenditure for each calendar year (see section 30-5 of HESA). Under section 30-10 of HESA, the Minister allocates Commonwealth supported places for funding clusters (see section 30-15) to eligible providers. These allocations are specified in funding agreements between the Commonwealth and relevant higher education providers.

Section 33-5 of HESA sets out how the basic grant amount is calculated for each provider. This is based, in part, on the allocated number of Commonwealth supported places in each funding cluster multiplied by the Commonwealth contribution rate for a place in that funding cluster. Section 33-25 provides for adjustments to the basic grant amount, based on a comparison of allocated places for the previous year and the value of actual places provided in the previous year.

In practice, higher education providers may provide more places than they have been allocated (or what is referred to as 'target student load'). In these cases, the amount paid to a provider for a year is the total amount for its target number of student places, plus an amount for the over enrolments for the previous year.

The Higher Education Support Amendment (2010 Budget Measures) Act 2010 amended section 30-5 of HESA to provide for changes to the maximum grant amounts for the Commonwealth Grant Scheme for 2010 and 2011 to take account of movements in indexation and transitional arrangements for over enrolments for 2010 and 2011. These transitional arrangements for 2010 and 2011 lifted the cap on over enrolments from 5 per cent to 10 per cent more than the amount for its target load.

Detailed explanation

Part 1 - Amendments

Higher Education Support Act 2003

Item 1 - Section 8-1

Section 8-1 of HESA provides an overview of the content of Chapter 2 of HESA (Grants for higher education assistance etc.).

Among other things, section 8-1 provides that one of the three kinds of Commonwealth grants to higher education providers under Chapter 2 of HESA is grants under Part 2-2 of HESA (the Commonwealth Grant Scheme) and that " Amounts of grants are based largely on the number of Commonwealth supported places that the Minister allocates to each provider. "

The move to a demand driven system means that Commonwealth Grant Scheme grants under Part 2-2 would no longer need to be tied to the allocation of Commonwealth supported places to higher education providers . Item 1 therefore amends section 8-1 to remove this reference to grants being based largely upon Ministerial allocations and inserts the following words in their place: " These grants are paid in relation to Commonwealth supported places ".

Item 2 - Section 27-1

Section 27-1 of HESA provides an overview of the content of Part 2-2 of HESA (Commonwealth Grant Scheme).

Among other things, section 27-1 provides that " Amounts of grants are based largely on the number of Commonwealth supported places that the Minister allocates to each provider. "

The move to a demand driven system means that Commonwealth Grant Scheme grants under Part 2-2 would no longer need to be tied to the allocation of Commonwealth supported places to higher education providers . Item 2 therefore amends section 27-1 to remove this reference to grants being based largely upon Ministerial allocations and inserts the following words in their place: " These grants are paid in relation to Commonwealth supported places. "

Item 3 - Paragraphs 30-1(1)(a), (b) and (c)

Paragraphs (a), (b) and (c) of subsection 30-1(1) of HESA set out eligibility criteria for Commonwealth Grant Scheme funding to be payable for a year to higher education providers under Part 2-2. Currently, these criteria are as follows:

-

Table A providers: the Minister has allocated a number of Commonwealth supported places to the provider for the year under section 30-10 and the provider has entered into a section 30-25 funding agreement with the Commonwealth in respect of the year.

-

Non-Table A providers: the provider is one that the Commonwealth Grant Scheme Guidelines specify can be paid grants under Part 2-2, the Minister has allocated a number of Commonwealth supported places to the provider for the year under section 30-10, the provider has entered into a section 30-25 funding agreement with the Commonwealth in respect of the year and the grant relates to national priorities (see subsection 30-1(2) and section 30-20).

Item 3 repeals these paragraphs and substitutes in their place paragraphs (a) and (b).

The effect of new paragraphs 30-1(1)(a) and (b) is that a higher education provider will be eligible for Commonwealth Grant Scheme funding as follows:

-

Table A providers: the provider has entered into a section 30-25 funding agreement with the Commonwealth in respect of the year (new paragraph 30-1(1)(a)).

-

Non-Table A providers: the provider is one that the Commonwealth Grant Scheme Guidelines specify can be paid grants under Part 2-2, the Minister has allocated a number of Commonwealth supported places to the provider for the year under section 30-10 and the provider has entered into a section 30-25 funding agreement with the Commonwealth in respect of the year (new paragraph 30-1(1)(b)).

Item 4 - Section 30-5

Section 30-5 of HESA requires the Minister to ensure that the total amount of Commonwealth Grant Scheme payments that are payable to higher education providers under Part 2-2 in particular years does not exceed the maximum specified in section 30-5 for the year in question (maximum amounts are specified for the years 2005 to 2011).

Item 4 repeals section 30-5, which will be redundant with the commencement of the demand driven funding system for undergraduate student places.

Item 5 - Subsection 30-10(1)

Under subsection 30-10(1) of HESA, the Minister may allocate a specified number of Commonwealth supported places to higher education providers before the commencement of a year.

Item 5 repeals and substitutes subsection 30-10(1). The new subsection 30-10(1) allows the Minister to allocate Commonwealth supported places before the commencement of a (calendar) year to the following:

-

Table A providers in respect of designated courses of study (see Item 8 of Schedule 1 for the meaning of designated courses of study)

-

those higher education providers referred to in subparagraph 30-10(1)(b)(i) (see Item 3 of Schedule 1- the provider is one that the Commonwealth Grant Scheme Guidelines says can be paid grants under Part 2-2)).

A note explains that the Minister does not allocate places to Table A providers in respect of non-designated courses of study (this will be the case on the commencement of the demand driven system). This provision will operate as the current section 30-10 does but only in relation to designated courses of study. These courses of study are non-research postgraduate courses of study, courses of study in medicine and courses of study that the Minister will have the ability to specify in legislative instruments. Any specification of the latter courses is subject to Parliamentary scrutiny and is therefore not a reviewable decision.

Items 6 and 7 - Subsection 30-10(3) and At the end of section 30-10

Section 30-10 of HESA concerns the allocation of Commonwealth supported places by the Minister. Subsection 30-10(3) currently provides that the allocation may, in addition to the matters specified in subsections 30-10(1), (2) and (2A), specify the number of places with a regional loading, a medical student loading, an enabling loading and a transitional loading.

Item 6 repeals subsection 30-10(3). Other amendments made by Schedule 1 of this Bill provide for calculations in relation to loadings to be worked out under the Commonwealth Grant Scheme Guidelines for a provider for a year (see the amendments to section 33-1 made by Item 11).

Item 7 inserts new subsection 30-10(5) which clarifies that if the allocation made under subsection 30-10(1) (to allocate a specified number of Commonwealth supported places to a Table A provider in relation to designated course of study or to a non-Table A higher education provider) is made in writing, the allocation is not a legislative instrument.

Subsection 30-10(5) is included to assist readers, as the allocation is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. This subsection is merely declaratory of the law.

Item 8 - After section 30-10

Item 8 inserts a new section 30-12 into HESA which provides for the meaning of designated courses of study. This term means, for Table A providers:

-

non-research postgraduate courses of study

-

courses of study in medicine

-

courses of study that are specified in a legislative instrument made by the Minister.

Under the amendments made by Item 5, the Minister will be allocating places for designated courses of study ( including non-research postgraduate courses of study and courses of study in medicine) and Table A providers will be eligible to receive Commonwealth Grant Scheme funding with respect to such allocations of places. In principle, this will be a continuation of the current approach to dealing with these types of courses of study, although the methodology for calculating the basic grant amount for a provider is changed by other amendments - see Item 14.

In addition, the Minister will have the ability to specify, by legislative instrument, courses of study as designated courses of study (ie courses of study for which the Minister would be able to allocate places). This will provide the Minister with the ability to place restraints on the kinds of courses for which providers can receive funding under Part 2-2 of HESA.

This could, for example, be useful in the event that there is an excessive supply of a particular type of graduate, or if there is insufficient availability of the clinical placements necessary to ensure an appropriate level of skill among people graduating in a particular profession.

Item 9 - Before paragraph 30-25(3)(a)

Section 30-25 of HESA provides that the Minister may, on behalf of the Commonwealth, enter into funding agreements with higher education providers relating to Commonwealth Grant Scheme grants under Part 2-2 of HESA.

It is these funding agreements that specify the number of Commonwealth supported places allocated by the Minister. Currently, subsection 30-25(3) provides that the agreements may specify the minimum number of Commonwealth supported places that a provider must provide in the relevant grant year, or the maximum number of Commonwealth supported places the provider may provide in the year, or both - with respect to places in the following:

-

undergraduate courses of study

-

non-research postgraduate courses of study

-

courses of study in medical programs

-

courses of study in enabling programs.

Item 9 inserts a new paragraph 30-25(3)(aa) before paragraph 30-25(3)(a), which provides that the funding agreement may specify the number of Commonwealth supported places allocated to the provider under section 30-10 for the relevant grant year (see Item 5).

Maximum basic grant amounts

Items 10 - At the end of Subdivision 30-C and 31 - Subclause 1(1) of Schedule 1

Subdivision 30-C of HESA concerns funding agreements for Commonwealth Grant Scheme grants under Part 2-2 of HESA.

Item 31 inserts the definition of maximum basic grant amount into the dictionary at subclause 1(1) of Schedule 1 of HESA . Maximum basic grant amount has the meaning given in new subsection 30-27(1) of HESA. That is, the amount, if any, specified in the funding agreement with a provider for a year as the maximum basic grant amount for that provider for that year. This capacity to specify maximum basic grant amounts for each provider for each year will allow the Commonwealth the flexibility to operate on an institutional basis.

Item 10 inserts new section 30-27 at the end of Subdivision 30-C of HESA.

New section 30-27 allows the funding agreement to specify maximum basic grant amounts payable to higher education providers.

New subsection 30-27(1) provides that funding agreements may specify maximum basic grant amounts payable for a grant year for Table A providers (for designated courses of study (see Item 8) and for non-designated courses of study) and for non-Table A providers (see Item 14).

New subsection 30-27(2) provides that the maximum basic grant amount for Table A providers for designated courses of study must not be less than the amount calculated under subsection 33-5(4).

New subsection 30-27(3) provides that the maximum basic grant amount for Table A providers for non-designated courses of study for a grant year must not be less than the following:

-

if there was a maximum basic grant amount specified in the provider's funding agreement for the previous year, then this amount; or

-

if there was no maximum basic grant amount specified in the provider's funding agreement for the previous year, then as calculated under paragraph 33-5(5)(a) for the preceding year (see Item 14).

New subsection 30-27(4) provides that the maximum basic grant amount for non-Table A providers must not be less than the amount calculated under subsection

33-5(8) (see Item 14).

Items 11 and 12- Paragraphs 33-1(1)(b) and (c)

Section 33-1 of HESA sets out how the amount of Commonwealth Grant Scheme funding payable to a higher education provider under Part 2-2 is calculated which, currently, is as follows:

-

the basic grant amount is calculated under Subdivision 33-B (Basic grant amounts) ( per paragraph 33-1(1)(a))

-

if applicable, the basic grant amount is adjusted under Subdivision 33-C (Adjustments) ( per paragraph 33-1(1)(b))

-

if applicable for the 2011 year and beyond, the performance funding grant amount is added ((per paragraph 33-1(1)(c)).

Item 11 repeals paragraph 33-1(1)(b) and Item 12 repeals paragraph 33-1(1)(c) and substitutes a new paragraph 33-1(1)(b). The effect of this is that the following amounts to be calculated under the Commonwealth Grant Scheme Guidelines will be added to the basic grant amount calculated under Subdivision 33-B for the relevant year (if applicable to the provider):

-

regional loading

-

medical student loading

-

enabling loading

-

transitional loading

-

performance funding grant amount.

Item 13 - Subsection 33-1(1A)

Subsection 33-1(1A) provides that the performance funding grant amount for a higher education provider for a year, if any is payable, is worked out under the Commonwealth Grant Scheme Guidelines.

Item 13 repeals subsection 33-1(1A) of HESA. This is a consequential amendment to Items 11 and 12 which includes the performance funding grant amount in paragraph 33-1(1)(a) as one of the things that is to be added to a provider's basic grant amount in working out the grant payable to the provider under Part 2-2 of HESA.

Item 14 - Section 33-5

Section 33-1 of HESA provides that the amount payable to a provider under Part 2-2 is to be worked out by reference to the basic grant amount for the provider and other matters.

Currently, section 33-5 of HESA sets out how the basic grant amount is calculated for a provider for a year. This is done by looking at the Ministerial allocation of places to a higher education provider for each funding cluster (under section 30-10) and multiplying the number of Commonwealth supported places allocated by the Commonwealth contribution amount for a place in each relevant funding cluster. If the Ministerial allocation of places has particular loadings attached to any of those places, then amounts of regional loading, medical student loading, enabling loading and transitional loading as calculated under the Commonwealth Grant Scheme Guidelines are added to the basic grant amount.

References to loadings to are to be moved to paragraph 33-1(1)(b) - see Items 11 and 12 .

Item 14 repeals section 33-5 and substitutes a new section 33-5.

New subsection 33-5(1) provides that section 33-5 will set out how to calculate the basic grant amount for a provider for a year.

Basic grant amount for Table A providers

New subsection 33-5(2) provides that the basic grant amount for a Table A provider is the sum of the amounts for designated courses of study (as calculated under new subsection 33-5(3)) and the amounts for non-designated courses of study (as calculated under new subsections 33-5(5) and (6)).

Table A providers - amounts for designated courses of study

New subsection 33-5(3) provides that the basic grant amount for designated courses of study will be the lower of the following amounts:

-

the sum total of the amounts calculated for each funding cluster in which the provider provided places in designated courses of study - which is to be done by multiplying the number of Commonwealth supported places provided in the designated courses of study in the funding cluster by the Commonwealth contribution amount for a place in the funding cluster (see section 33-10) (new paragraph 33-5(3)(a)); and

-

either:

•

the maximum basic grant amount specified in the provider's funding agreement for designated courses of study (if one is specified in the funding agreement) (see section 30-25) (new subparagraph 33-5(3)(b)(i)); or

•

if the provider's funding agreement does not specify the maximum basic grant amount for designated courses of study - the amount calculated under new subsection 33-5(4) (new paragraph 33-5(3)(b)(ii)).

New subsection 33-5(4) sets out how to calculate the amount in new paragraph 33-5(3)(b)(ii) - in other words, if the Table A provider's funding agreement does not specify the maximum basic grant amount for designated courses of study. If the funding agreement does not do so, then the amount is the total sum calculated by looking at the Ministerial allocation of places to the provider for each funding cluster (under section 30-10) and multiplying the number of Commonwealth supported places allocated by the Commonwealth contribution amount for a place in the relevant funding cluster.

Table A providers - amounts for non-designated courses of study

New subsection 33-5(2) provides that the basic grant amount for a Table A provider is the sum of the amounts for designated courses of study (as calculated under new subsection 33-5(3)) and the amounts for non-designated courses of study (as calculated under new subsections 33-5(5) and (6)).

New subsection 33-5(5) provides that, subject to new subsection 33-5(6), the amounts for non-designated courses of study will be the lower of the following two amounts:

-

the sum total of the amounts calculated for each funding cluster in which the provider provided places in non-designated courses of study - which is to be done by multiplying the number of Commonwealth supported places provided in the non-designated courses of study in the funding cluster by the Commonwealth contribution amount for a place in the relevant funding cluster (see section 33-10) (new paragraph 33-5(5)(a)); and

-

the maximum basic grant amount specified in the provider's funding agreement for non-designated courses of study (see section 30-25) (new subparagraph 33-5(5)(b)).

New subsection 33-5(6) provides that, if the funding agreement does not specify the maximum basic grant amount for non-designated courses of study, then the amount is the amount calculated under new paragraph 33-5(5)(a).

Basic grant amounts for non-Table A providers

The basic grant amount for non-Table A providers is to be calculated as set out in new subsection 33-5(7). For non-Table A providers, the basic grant amount for a year will be the lesser of the following:

-

the sum total of the amounts calculated for each funding cluster in which the provider provided places - which is to be done by multiplying the number of Commonwealth supported places provided in that funding cluster by the Commonwealth contribution amount for a place in the funding cluster (see section 33-10) (new paragraph 33-5(7)(a)); and

-

either:

•

the maximum basic grant amount specified in the provider's funding agreement (if one is specified in the funding agreement) (see section 30-25) (new subparagraph 33-5(7)(b)(i)); or

•

if the provider's funding agreement does not specify the maximum basic grant amount - the amount calculated under new subsection 33-5(8) (new paragraph 33-5(7)(b)(ii)).

New subsection 33-5(8) sets out how to calculate the amount in new paragraph

33-5(7)(b)(ii) - in other words, if the non-Table A provider's funding agreement does not specify the maximum basic grant amount. If the funding agreement does not do so, then the amount is the total sum calculated by looking at the Ministerial allocation of places to the provider for each funding cluster (under section 30-10) and multiplying the number of Commonwealth supported places allocated by the Commonwealth contribution amount for a place in the funding cluster.

Items 15 and 18 - Subdivision 33-C (heading) and Before section 33-37

Item 15 repeals the heading to Subdivision 33-C (" Adjustments "). This is a consequential amendment to Item 16 ( which repeals section 33-25) and Item 18, which inserts the heading "Adjustments" before section 33-37. Sections 33-30 and 33-35 become part of subdivision 33B as they are necessary for the calculation of basic grant amounts. The heading is being moved to above the only remaining section in Subdivision 33-C of Part 2-2 that deals with adjustments (section 33-37).

Item 16 - Section 33-25

Section 33-25 of HESA provides for adjustments to basic grant amounts . Item 16 repeals section 33-25.

A transitional amendment deals with the effect of the amendments to Division 33 of HESA made by this Schedule (see Item 36).

Currently, section 33-30 relates to calculating the total number of Commonwealth supported places provided by a provider. With the changes to allocation processes this is no longer necessary but providing for how the number of Commonwealth supported places provided in a funding cluster by a provider is still relevant as reflected in the amendments to section 33-30.

Item 17 - At the end of section 33-30

Section 33-30 sets out how to calculate the number of Commonwealth supported places that a higher education provider has provided.

The method statement in this provision is still required for other provisions in HESA.

The new provisions for calculating basic grant amounts also depend on places provided rather than places allocated as applied prior to the amendments.

Item 17 inserts a new subsection 33-30(3) which tells the reader how to work out the number of Commonwealth supported places that a higher education provider has provided for designated courses of study in a funding cluster; and the number of places that the provider has provided for non-designated courses of study in a funding cluster.

Subsection 33-30(3) explains that to work out the number of Commonwealth supported places that a higher education provider has provided in an item of column 1 of the table to the subsection, apply the method statement in subsection 33-30(1) to the units of study mentioned in column 2 of that item.

For example, in relation to item 2 of the table, to work out the number of Commonwealth supported places provided in designated courses of study in a funding cluster, apply the method statement in subsection 33-30(1) to units provided by the provider in the funding cluster in designated courses of study.

This is a consequential amendment required because of the repeal of section 33-25 (and specifically 33-25(5) which set out how to calculate a provider's corrected basic grant amount)) made by Item 16.

Items 19, 20 and 21 - Subsection 33-37(2) (formula), Subsection 33-37(2) (definition of total places allocated) and Subsection 33-37(2)

Subsection 33-37(1) of HESA provides that the amount of a higher education provider's basic grant amount for a grant year is to be reduced by an adjustment if the provider breaches a condition under section 19-37 (requiring membership of certain organisations, or requiring the payment of certain amounts). The adjustment in such cases is calculated using the adjustment formula specified in subsection 33-37(2).

Item 19 repeals and substitutes the adjustment formula in subsection 33-37(2). The new adjustment formula is the reduction amount (as specified in subsection 33-37(2)) multiplied by the total places provided by the provider . Item 20 repeals the definition of total places allocated and Item 21 inserts a new definition of total places provided to mean the total number of Commonwealth supported places that the higher education provider has provided for the grant year in question.

Items 22, 23 and 24 - Subsection 33-40(1), Subsection 33-40(3) and after Subsection 33-40(3)

Subsection 33-40(1) of HESA provides that the Minister may make determinations that an advance payment is to be made to a higher education provider for a year in relation to such expenditure of the provider as specified in the determination.

Item 22 amends subsection 33-40(1) by omitting the words "may determine" and substituting with the words "may, if an amount has been specified under subsection 33-40(3A), determine". The effect of this amendment is to clarify that the Minister may only specify an amount that can be advanced if an amount setting out the amount of the total amount of advances in respect of a year has been specified by the Minister under subsection 33-40(3A).

Subsection 33-40(3) provides that the total amount of such advances must not be more than the amount " set out in section 30-5 [ which specifies the total amounts of grants payable under Part 2-2 for the years 2005 to 2011 and which is to be repealed - see Item 4] in respect of the following year " . Item 23 amends subsection 33-40(3) by omitting these words and inserting in their place the words " specified by the Minister under subsection (3A) ".

Item 24 inserts a new subsection 33-40(3A) which provides that the Minister may, by legislative instrument, specify an amount for the purposes of subsection 33-40(3). In other words, the total amounts of advances of Part 2-2 grant monies that can be paid to providers for a year cannot exceed the amount the Minister specifies by way of a legislative instrument.

Item 25 - Paragraph 36-10(1)(a)

Subsection 36-10(1) of HESA provides that a higher education provider must not advise someone that he or she is a Commonwealth supported student unless all of the criteria in paragraphs 36-10(1)(a) to (e) are satisfied.

Item 25 amends paragraph 36-10(1)(a) by omitting the criterion that a number of Commonwealth supported places has been allocated to the provider under section 30-10 and replacing it with a new criterion that the provider has entered into a funding agreement under section 30-25.

Item 26 - Subsection 41-10(1) (table item 12)

The table in subsection 41-10(1) of HESA sets out which higher education providers are eligible for certain types of grants under Part 2-3 of HESA. Table item 12 currently provides that higher education providers to which Commonwealth supported places have been allocated for any year are eligible to receive grants to assist them with the transitional costs of changes to maximum student contribution amounts.

Item 26 amends table item 12 so that higher education providers that have provided Commonwealth-supported places for any year are eligible for these grants (ie the reference to allocated is to be replaced with a reference to provided). This is consequential on the earlier amendments made by this Schedule removing the requirement for the Minister to allocate places for non-designated courses for Table A providers.

Item 27 - Subparagraph 46-13(c)(ii)

Section 46-13 of HESA sets out eligibility criteria in order for students to receive directly paid standard Commonwealth scholarships. One of those criteria is the criterion in subparagraph 46-13(c)(ii) that the student is a student of a non-Table A higher education provider to which subparagraph 30-1(1)(a)(ii) applies. Subparagraph 30-1(1)(a)(ii) concerns the eligibility for grants under Part 2-2 of non-Table A providers that are specified in the Commonwealth Grant Scheme Guidelines as higher education providers that can be paid grants under Part 2-2.

Item 27 is a consequential amendment to Item 3 which repeals paragraphs 30-1(1)(a), (b) and (c) and replaces them with new paragraphs 30-1(1)(a) and (b) . Item 27 omits the reference to "subparagraph 30-1(1)(a)(ii)" and replaces it with a reference to "subparagraph 30-1(1)(b)(i)". The effect of this is that the reference will be to providers that are specified in the Commonwealth Grant Scheme Guidelines as a higher education provider that can be paid grants under Part 2-2.

Item 28 - Subsection 46-15(1)

Section 46-15 of HESA sets out eligibility criteria for higher education providers to receive grants for certain scholarships. One of these criteria is the criterion in subsection 46-15(1) that Table A providers and other higher education providers to which subparagraph 30-1(1)(a)(ii) applies are eligible to receive a grant from the Commonwealth to pay indirectly paid standard Commonwealth scholarships to their students. Subparagraph 30-1(1)(a)(ii) concerns the eligibility for grants under Part 2-2 of non-Table A providers that are specified in the Commonwealth Grant Scheme Guidelines as higher education providers that can be paid grants under Part 2-2.

Item 28 is a consequential amendment to Item 3 which repeals paragraphs 30-1(1)(a), (b) and (c) and replaces them with new paragraphs 30-1(1)(a) and (b) . Item 28 omits the reference to "subparagraph 30-1(1)(a)(ii)" and replaces it with a reference to "subparagraph 30-1(1)(b)(i)". The effect of this is that the reference will be to providers that are specified in the Commonwealth Grant Scheme Guidelines as higher education providers that can be paid grants under Part 2-2.

Items 29-32 make various amendments to the dictionary in Schedule 1 of HESA which are necessary to give effect to other amendments made by this Schedule.

Item 29 - Schedule 1, subclause 1(1) (definition of corrected basic amount)

Item 29 repeals the definition of corrected basic amount in the dictionary at subclause 1(1) of Schedule 1 of HESA. This definition is no longer required because the former methodology for adjustments will (except as provided for by Item 36) no longer apply.

Item 30 - Schedule 1, subclause 1(1)

Item 30 inserts a definition of designated courses of study into the dictionary at subclause 1(1) of Schedule 1 of HESA. This definition provides that the meaning is the same as in new subsection 30-12(1) (see Item 8).

Item 31 - Schedule 1, subclause 1(1)

Item 31 inserts the definition of maximum basic grant amount into the dictionary at subclause 1(1) of Schedule 1 of HESA. This definition provides that the meaning is the same as in subsection 30-27(1) of HESA (see Item 10).

Item 32 - Schedule 1, subclause 1(1)

Item 32 inserts the definition of non-designated courses of study into the dictionary at subclause 1(1) of Schedule 1 of HESA - which means courses of study that are not designated courses of study ( see Items 8 and 30).

Part 2-Application, savings and transitional provisions

Item 33 - Definitions

Item 33 provides that in Part 1 of Schedule 1:

-

commencement means the commencement of Schedule 1

-

new Act means HESA as it will be in force on and after the commencement of Schedule 1

-

old Act means HESA as it was in force immediately before the commencement of Schedule 1.

Item 34 - Application of amendments - general

Item 34 makes it clear that the amendments made by Schedule 1 apply to the year commencing on 1 January 2012 and to subsequent years.

Item 35 - Transitional - maximum basic grant amount for non-designated courses of study for Table A providers for 2012

Item 35 is a transitional provision which provides that for the purposes of working out the amount mentioned in paragraph 30-27(3)(b) of the new Act (Table A providers maximum basic grant amounts for non-designated courses of study) for the year 2012, the amount is to be worked out as if paragraph 33-5(5)(a) of the new Act (Table A providers amount of non-designated courses of study) applied to the year 2011. The effect of this provision is to clarify how a Table A provider's maximum basic grant amount for the grant year 2012 will be calculated.

Item 36 - Transitional - adjustment of basic grant amount for 2012

Currently, Division 33 of HESA contains various provisions relating to when and how adjustments are to be made to a provider's basic grant amount under Part 2-2 of HESA.

Item 36 provides that, despite the amendments made by Items 11, 15, 16 and 18, a higher education provider's basic grant amount for the year 2012 (as worked out under the new Act) is to be adjusted as if the amendments had not been made. (In other words, the adjustment provisions in Division 33 of the old Act will apply to 2012.)

A note at the end Item 36 has been inserted to assist the reader to clarify that adjustments of basic grant amounts for 2011 or an earlier year are not affected by the amendments made by Schedule 1.