2010 Contributions Criteria and Special Levy

The Contributions Review Panel (the Panel) is established under section 54 of the Education Services for Overseas Students Act 2000 (the ESOS Act) to determine the criteria for each provider’s annual contribution to the ESOS Assurance Fund (the Fund).

Each year the Fund Manager proposes draft criteria for the Panel to consider. The role of the Panel is to accept the criteria without change, or ask the Fund Manager to revise the criteria. The Panel met twice this year, in September and October, to determine the criteria for 2010. The Panel agreed that the Contributions Criteria for 2010 should incorporate the following key changes relative to the criteria applying in 2009:

• an increase in the base rate of risk cost contributions to 0.109% of a provider’s annual fee income (up from 0.062% in 2009);
• an increase in the base rate of capital cost contributions to 0.08% of a provider’s annual fee income (up from 0.028% in 2009); and
• the introduction of new procedures designed to levy a higher rate of contribution from those providers offering ‘uncovered’ courses (i.e., courses not covered by a Primary Assurance Mechanism), or with enrolment levels significantly above their approved capacity. The application of these new procedures is expected to generate up to $400,000 in additional contributions in 2010.

In addition, and in recognition of the urgent need to support the solvency of the Fund in the immediate term, the Panel has also agreed to the imposition of a Special Levy on providers under the provisions of section 72 of the ESOS Act. This decision, to be implemented late in 2009, will raise $1 million in aggregate from providers to support the solvency of the Fund over the next six months.

The Panel has also recognised that a further Special Levy may need to be considered in the course of 2010, should circumstances warrant.