School operations

Student Resource Package — Equity Funding (Student Based Funding)

Disability Inclusion Tier 2 school-level funding (Reference 137) 

The Disability Inclusion reform package will introduce a new funding and support model for students with disability over a staged rollout between 2021 to 2025. Refer to: Disability Inclusion Funding and Support.

Tier 2 school-level funding builds on the core student learning allocation funding by recognising that additional funding will further strengthen school capacity (staff time and resources) and capability (staff skills and knowledge) to better meet the needs of students with disability. This also recognises that to meet the diverse needs of students with disability, increasing frequency and intensity of support can be required.

It is important to note that Tier 2 school-level funding builds on the quality teaching and differentiated practice for all students, including students with disability delivered through core student learning allocation funding.

Schools will use Tier 2 funding to develop more inclusive education environments, with flexibility to tailor support to their local context and needs of their student cohort. Refer to the Disability Inclusion Funding and Support Guidance tab for Tier 2 funding and support implementation.

Schools must make reasonable adjustments to ensure that students with disability can access and participate in education on the same basis as students without disability, regardless of the availability of additional funding. Refer to: Students with Disability.


The following school types are eligible for Tier 2 school-level funding:

  • Primary
  • Secondary
  • Primary/Secondary Combined
  • Specialist.

Funding is allocated as a credit and cash allocation.

Tier 2 school-level formula

Tier 2 funding is calculated using a formula, which is comprised of 2 parts:

  • Part 1: a base funding component, which ensures all schools have a basic level of resources required to enhance overall school-level capacity to provide inclusive education and engage in new Disability Inclusion processes.
  • Part 2: a variable funding component, which builds on the base component to provide additional resources calculated based on the school’s characteristics, to support schools to further enhance capacity and strengthen adjustments for students with disability. This means schools will have resources to continue to build school capacity in line with their unique school attributes. Funding in this component varies across schools based on the estimated prevalence of need for adjustment at a school level.

Part 1: Base funding component

This component allocates each school a ‘base amount’ based on enrolments that increases linearly up to 100 enrolments, as outlined below:

  • schools with 5 students or less, the base amount is $5,100
  • schools with between 6 and 99 enrolments, the base amount is $5,100 + (number enrolments − 5) × $268.42
  • schools with 100 students or more, the base amount is capped at a maximum of $30,600*.

*Due to their special circumstances, the capping of $30,600 will not apply to the total base allocation of a mainstream school which also has a special development campus. The base allocation will be calculated separately for enrolments of special development campuses of mainstream schools.

Part 2: Variable funding component

The variable funding component takes the characteristics of students in a school and uses these measures to calculate an allocation of funding. This component is calculated based on:

  • an index, calculated using statistical weights based on:
    • student family education (SFE) – which is an indicator of socio-educational disadvantage
    • school type (primary)
    • school size (small school with less than 100 enrolments)
  • number of enrolled students
  • a variable funding rate.

The index value is multiplied by the number of enrolments in the school and the variable funding rate to calculate the school-level funding amount.

Index calculation

The index is calculated using the weights for the index categories outlined in table 1 below. The weights are used directly within the funding formula.

For SFE, the weight is multiplied by the share of students in each SFE category (SFE 1 to SFE 7).

Weights result in the allocation of relatively more funding to schools with those attributes.

Each school’s index value is updated each year based on the latest available data.

Table 1: Index categories and weightings
Index categories Weighting
SFE 1, 2 (Year 9 or below or Year 10 or equivalent) 0.1800
SFE 3, 4 (Year 11 or equivalent or Year 12 or equivalent) 0.1158
SFE 5 (Certificate I to IV) 0.1127
SFE 6, 7 (Diploma or above) 0.0117
School enrolments (<100 enrolments) 0.0202
Primary school 0.0348

Tier 2 school-level funding calculation

Total Tier 2 school-level funding is calculated as:

Base funding component + (Index × Enrolments × Variable Funding Rate).

Where: the variable funding rate for 2021 is $2,200.

Note, for schools in the Bayside Peninsula, Barwon and Loddon Campaspe areas as well as 5 specific supported inclusion schools: the 2021 Semester 2 allocation of Tier 2 school-level funding does not necessarily represent half of the 2022 allocation. For these schools, 2022 allocations will be communicated as part of the indicative SRP release in September or October 2021.  

Example of Tier 2 school-level funding calculation for a school

Consider a primary school with 90 enrolments and the following SFE distribution: 15% of enrolments are in SFE 1 and SFE 2 category; 15% of enrolments are in SFE 3 and SFE 4 category; 25% of enrolments are in SFE 5 category; 45% of enrolments are in SFE 6 and SFE 7 category.

Base calculation

The base would be calculated as:

$5,100 + (90 − 5 enrolments = 85 enrolments) × $268.42 = $27,915.70

Index calculation

The index would be calculated as:

(15% × 0.1800) + (15% × 0.1158) + (25% × 0.1127) + (45% × 0.0117) + (1 × 0.0202) + (1 × 0.0348) = 0.1328

Total annual school allocation

Total Tier 2 funding for the example school would be:

$27,915.70 + (0.1328 × 90 × $2,200) = $54,210*

*Note this value includes salary on-costs. The central on-costs are not reflected in school budgets.

Reference 137 of the SRP Guide, providing information on Disability Inclusion Tier 2 school-level funding including eligibility and rates

Reviewed 05 August 2021

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