Systems of schools such as the NSW Catholic schools system, which is the largest non-government system in Australia, receive a pooled funding amount for all their constituent schools.

The SRS methodology was designed to allocate funds across Australian schools based on broad measures of need. The Commonwealth recognises that systems often have more detailed local knowledge that can allow funding to be deployed more effectively to meet the precise needs of students. So, larger systems are not required to deploy their funds to their schools in the same manner as they are attracted.

Non-government school systems, as well as the NSW Catholic schools system, typically adopt this approach. For example, if student wellbeing is a concern in a school, funding will be applied to address this, even though this does not form part of the funding attracted based on the SRS model.

This document sets out the needs-based funding arrangements for deploying these funds to benefit our students.

Background

The current Funding Distribution Model (“FDM”) was approved by the Bishop Members in 2019, for the four-year period from 2020 to 2023. The current FDM will expire in December 2023.

There will be a further six years (from 2024 to 2029) remaining of the Government’s current funding methodology after the expiry of the current FDM (in 2023).

The process of developing the next FDM was commenced by CSNSW (in September 2022). A final version of the FDM was determined by the CSNSW Board and approved by the Bishop Members in July 2023.

The new model is approved for the remaining term of the government model to the end of 2029 and was effective from 1 January 2024.

Parameters of New Funding Model 2024-2029

The next FDM has aligned with the remaining term of the current agreement with the Commonwealth and State government (2024-2029), delivering operational certainty to the NSW Catholic Schools System.

The eleven NSW Diocesan Schools Offices (sub-systems) retain the prerogative of internal distribution subject to legislative and regulatory requirements (including reporting).

The Choice and Affordability Fund (“CAF”) component of the FDM aligns with the sector’s advocacy to the Commonwealth and the original policy intent, namely the moderation of primary school fee levels in support of school choice objectives for schools that would otherwise face undue pressure to raise fees.

The new model was approved by special resolution in the July 2023 Members’ meeting and will come into operation on 1 January 2024.

Frequently Asked Questions

Catholic Schools NSW educates approximately 127,000 primary school students and 100,000 secondary school students across close to 550  schools in the NSW Catholic Schools System.

How does a school within the NSW Catholic Schools System differ from a non-systemic Catholic school?

NSW Catholic schools are operated by the relevant Diocesan Schools Office whereas non-systemic Catholic schools are operated by a religious order or a Public Juridic Person (a Catholic legal entity established for school governance purposes).  The non-systemic Catholic schools are funded directly by Government, not the System Authority.

Who pays for a child’s education at Catholic Schools in NSW?

Responsibility for funding the cost of education is shared by the Australian Government, the NSW Government and by parents and school communities.

In 2024, CSNSW will receive a forecast $3.65 billion in recurrent funding from the Commonwealth and NSW State governments. NSW Catholic Schools System schools will also raise an estimated $550 million from school fees and $100 million from other private income sources, including donations and investments.

How is school funding calculated?

School funding is based on the Schooling Resource Standard (SRS), which is the government’s estimate of the cost to educate a student. The SRS is used as the base amount in the calculation of recurrent funding. It may also be supplemented by loadings, which address the needs of disadvantaged schools and students. Critically, in the case of non-government schools, the base funding is discounted by a Capacity to Contribute (CTC).

How is the amount of base funding determined?

This is known as the Schooling Resource Standard (SRS) and is indexed annually. The government estimates that the minimum cost to educate a child in an Australian school in 2024 is $13,557 for a primary school student and $17,036 for a secondary school student.

What are loadings?

Loadings are additional amounts that address the needs of priority cohorts of students and disadvantaged schools, including:

• Students with disabilities
• Students with low English proficiencies
• Students of Aboriginal or Torres Strait Islander backgrounds
• Students with socio-educational disadvantages
• Small Schools
• Remote Schools

On average, loadings make up approximately 24% of total funding for the NSW Catholic Schools System. However, the composition varies from school to school.

What is Capacity to Contribute?

The Capacity to Contribute (CTC) is a measure of the capacity of the parents or guardians of students to contribute to the cost of educating their child. CTC only applies to non-government schools, such as those within the NSW Catholic Schools System, and calculates the amount of Government funding to be deducted from a Catholic school’s SRS.

How is the Capacity to Contribute calculated?

A school’s Capacity to Contribute (CTC) is calculated by reference to a Direct Measure of Income (DMI). The DMI is based on the taxable income of the parents and guardians of the school’s students. The DMI data is collected by the Australian Government Department of Education from the Australian Taxation Office and other government agencies’ records. The data is used to:

• Identify the median (middle) family income from all family incomes within a school;
• Rank the median incomes calculated for all non-government schools; and,
• Convert the ranked median incomes into a set of DMI scores.

The DMI scores are averaged over three years to determine a CTC score for each school.

Schools with the lowest CTC scores are entitled to 90% of the SRS, reducing progressively to 20% of the SRS for schools with the highest CTC scores.

What happens after CSNSW receives government funding?

As an Approved System Authority (ASA), CSNSW receives all funds before distributing them to the 11 dioceses within the NSW Catholic Schools System. A funding distribution model is used for this disbursement. Each diocese has the discretion and flexibility to determine how they deploy or allocate the funds to their schools. That’s because the Diocesan Schools Offices (DSO) are best placed to understand each school’s individual needs, based on their local knowledge of the school and its community. As a result, each DSO may fund individual schools differently.

How many dioceses make up the NSW Catholic Schools System?

There are 11 Diocesan Schools Offices (DSO) in the NSW Catholic Schools System. These are:

• Diocese of Armidale
• Diocese of Bathurst
• Diocese of Broken Bay
• Archdiocese of Canberra and Goulburn
• Diocese of Lismore
• Diocese of Maitland-Newcastle
• Diocese of Parramatta
• Archdiocese of Sydney
• Diocese of Wagga Wagga
• Diocese of Wilcannia-Forbes
• Diocese of Wollongong

Why is funding calculated using a needs-based arrangement?

The simple answer is that it is required by legislation. However, the CSNSW Funding Distribution Model also strives to equitably meet the individual needs of schools and students. The government funding received by CSNSW is distributed in line with the “needs-based principle”, as determined by the funding legislation.

How is government recurrent funding used?

Funding for schools primarily covers a school’s operational costs:

• Salaries (including principals, teachers and support staff)
• Operating costs (including administration, marketing, IT and accounting)
• Property expenses (including maintenance and utilities)
• Debt servicing costs; and
• Capital equipment

Does needs-based funding cover the cost of running a school?

In addition to recurrent funding for their day-to-day operations, schools typically require further resources. These are used for additional needs such as buildings, (classrooms, libraries, and sports facilities). This additional funding can be raised from other sources, including school fees.

What do you do with unspent funding?

All government recurrent funding received is spent (or committed to be spent) on school operations in the year it’s received.

Is CSNSW accountable to governments for how it uses its funding?

CSNSW is committed to offering both transparency and accountability in the way it receives and distributes funding. As part of its regulatory responsibilities, CSNSW submits annual funding reports to both the Australian and NSW Governments and is subject to comprehensive oversight regimes by the NSW and Commonwealth Departments of Education.