Facts about the new method for assessing school funding for Catholic schools

While the topic of school funding may seem a little bland in the everyday lives of families, it’s important to understand the facts when it comes to government funding allocations to Catholic schools in Victoria and across Australia.

We often hear exaggerated stories in the media and from the government school perspective about unfair levels of funding to Catholic and Independent schools. These stories create the impression that somehow Catholic schools receive more funding than government schools. However, the latest data shows that, throughout Australia, Catholic schools receive only 79% of the government funding that government schools receive.

The facts are that the education of children costs money. The hiring of staff, consideration of the diverse needs of students and the extensive programs offered in schools all cost money no matter which school your child attends or which sector. Someone has to fund these expenses. Parents in government schools have school costs fully paid by taxpayers, while parents in Catholic schools do not and have to make financial sacrifices. This is a simple fact. 

A very important change is being made to the method the government uses to determine how much government funding Catholic and independent schools should receive. This follows an independent review by the NSRB – National Schools Resourcing Board. The NSRB determined that there should be a new way of measuring the capacity of parents to pay school fees in the Catholic and independent sector. As the assessed capacity of parents to pay school fees increases, the amount of government funding a school receives decreases. 

Previously, this assessment was undertaken based on the socio-economic status (SES) of the area in which school families lived. This SES model was investigated by the NSRB, which found it to be an unfair and inaccurate estimate of the capacity of parents to pay fees. The NSRB recommended that this assessment instead be based on the actual incomes of families in each school. 

The Government accepted this recommendation and has developed a new measure for schools, known as Direct Measure of Income (DMI) scores. School DMI scores are replacing school SES scores as the main determinant of the government funding they receive. By 2022 all Catholic and independent schools will be funded based on DMI scores following a transition period.

How do DMI scores impact parents of children in Catholic schools?

DMI scores are estimated through a highly sophisticated data-matching process undertaken by the federal education department and the Australian Bureau of Statistics (ABS). At the start of the process, schools must provide the names and addresses of parents/guardians for each student to the government. This information is then matched to various data on parent incomes held by the government (Income Tax Returns, Group Certificates, Social Security data) with a family income then estimated for each student. The Government then produces a school DMI score from this data. In essence, DMI scores are a means-test to determine how much funding should be allocated to each individual school dependent on parent income data.

All of the data-matching is undertaken in a highly confidential and secure way by the ABS – similar to the way it handles Census data. The school where your child attends will not have any capacity to access income tax data. The only information that schools will receive from the Government after they submit parental names and addresses is their DMI score. Thus there are no reasons to be concerned about the privacy of your data. It is important for parents to ensure their address information is kept up to date with the school to assist this process. Should you change address, it is critical that you provide that information to the school. 

The old SES model of funding was assessed every 5 years as it was based on Census data. The new methodology no longer relies on Census data, so it will now be assessed every 12 months. This results in a more accurate measure of parent capacity to pay school fees and enables the school to determine the fee structure more accurately. While there may be slight variations each year depending on parental income data, the shift in funding each year, either up or down, will be minimal and there will be a rolling 3-year average applied.

This new methodology for determining funding allocation has been a hugely successful reform for Catholic schools. The previous, SES system was shown to over-estimate the capacity of parents in Catholic schools to pay fees, unfairly decreasing the amount of government funding they receive. The new DMI scores will ensure funding allocations are fair and equitable, and result in increased funding for Catholic schools. This also enables Catholic schools to keep their fees as low as possible to provide further choice for families who are seeking a Catholic education for their children.

The new funding model applies to both primary and secondary Catholic schools across Victoria and will provide further financial security for Catholic schools moving forward.

Flexible arrangements to meet other priorities have been established via a Choice and Affordability Fund including:

• Choice and affordability of low fee schools
• Special circumstances
• Strengthening outcomes for students with disability
• Student wellbeing and support
• Transition assistance for some schools

CSPV would like to acknowledge the efforts of the Catholic education sector in Victoria over the past four years in their relentless advocacy and campaigning to ensure SES scores are replaced by DMI scores. The new measure will better reflect family incomes in schools and direct more government funding to schools with more low-income families. This change is critical to ensuring our schools are funded fairly by the federal government. It is also worth acknowledging parents of children in Catholic schools for your ongoing support for Catholic education in choosing to send your child to a Catholic school.

CSPV will continue to monitor the progress of the rollout of the DMI method as Catholic schools see the benefits of years of campaigning for Catholic school funding to remain a significant priority for government and the (number of children) Catholic school children across Australia.