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 resources 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 advice on how to plan, implement and monitor Tier 2 funding and support.

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.

All schools receiving Disability Tier 2 funding must plan expenditure within the school’s Annual Implementation Plan and document the plan in the Strategic Planning Online Tool (SPOT) funding planner. Schools are required to report Tier 2 expenditure using eduPay (for credit transactions) and CASES21 (for cash transactions).

Note: Effective June 2023, the rollout of Tier 2 funding commenced prior to the original schedule for Year 4 and 5 rollout schools. This means that a half-year allocation is reflected in the 2024 Indicative SRP for schools in Year 5 rollout areas:

  • Hume Merri-bek, Outer Gippsland, Wimmera South West, and Inner Eastern Melbourne.


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

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

Funding is allocated as approximately 90% credit and 10% cash funding.

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 $5,265.71
  • schools with between 6 and 99 enrolments, the base amount is $5,265.71 + (number enrolments − 5) × $277.14
  • schools with 100 students or more, the base amount is capped at a maximum of $31,594.27.

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)
    • base (note that this is only applied to the first 100 enrolments in the school)
  • 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 categoriesWeighting
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
Base (applies to the first 100 students only)0.0202
Primary school0.0348

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 2024 is $4,656.34 (credit: 89.7%, cash: 10.3%).

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:

$5,265.71 + (90 − 5 enrolments = 85 enrolments) × $277.14 = $28,822.84

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:

$28,822.84 + (0.1328 × 90 × $4,656.34) = $84,475.39

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

Reviewed 26 March 2024

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