Tertiary Education Quality and Standards Agency (Registered Higher Education Provider Charge) Guidelines 2022

EXPLANATORY STATEMENT

Issued by the authority of the Tertiary Education Quality and Standards Agency

Subject: Tertiary Education Quality and Standards Agency (Registered Higher Education Provider Charge) Guidelines 2022

Authority

Section 204 of the Tertiary Education Quality and Standards Agency Act 2011 (the TEQSA Act) provides that TEQSA may, by legislative instrument, make Guidelines as permitted by section 26C of the TEQSA Act. Subsection 26C(2) sets out the matters that such Guidelines may make provision for or in relation to.

Purpose and operation

The purpose of this instrument, the Tertiary Education Quality and Standards Agency (Registered Higher Education Provider Charge) Guidelines 2022 (Charging Guidelines) is to create guidelines making provision for, or in relation to, matters set out in subsection 26C(2) of the TEQSA Act. These matters include:

The issuing of notices setting out the amount of the registered higher education provider charge;
When the registered higher education provider charge is payable;
The refund, remission or waiver of the registered higher education provider charge; and
The review of decisions made under the Charging Guidelines in relation to the collection or recovery of the registered higher education provider charge.

The Charing Guidelines are designed to work with the Tertiary Education Quality and Standards Agency (Charges) Regulations 2022 (Charging Regulations) and reflect a decision by the Australian Government in the 2018-2019 Budget to implement revised cost recovery arrangements for the Tertiary Education Quality and Standards Agency (TEQSA). Historically, TEQSA has recovered approximately 15% of its costs via the fees set out in the Tertiary Education Quality and Standards Agency Determination of Fees No.1 of 2020 but, from 1 January 2023, TEQSA will be moving toward a model under which it recovers 90% of its costs.

The new cost recovery model has necessitated the implementation of a new “registered higher education provider charge”. The charge is imposed by the Tertiary Education Quality and Standards Agency (Charges) Act 2021 (Charges Act). Section 26C of the TEQSA Act imposes a condition on the registration of all registered higher education providers that requires those providers to pay the registered higher education provider charge. The registered higher education provider charge is designed to recover the costs of the Tertiary Education Quality and Standards Agency’s (TEQSA) sector risk monitoring and regulatory oversight activities.

The Charging Regulations prescribe a method for working out the amount of the registered higher education provider charge for a year for a registered higher education provider. The Charging Guidelines will compliment the Charging Regulations by providing what must be included in a notice sent to a registered higher education provider informing the provider of the amount of the registered higher education provider charge. The Charging Guidelines will also provide when the registered higher education provider charge, or a component or a part of the charge, may be waived and sets out a process for the review of decisions made under the Charging Guidelines.

Consultation

TEQSA undertook public consultation on its revised cost recovery arrangements with higher education sector stakeholders in between April and June 2021. TEQSA received 39 stakeholder submissions through the consultation process, including from peak bodies and individual higher education providers.

Stakeholders expressed concerns regarding the complexity of the cost recovery model, the timing of implementation (given the impacts of COVID-19) and the regressive nature of the annual provider charge (charged at a flat rate to all providers). There was qualified acceptance of features in the model relating to fees.

The decision made by the Government to delay implementation by one year, to 1 January 2023, was informed by the concerns raised with regard to timing.

The concerns about complexity of the model informed TEQSA’s decision to simplify the charges relating to compliance by largely converting hourly charging for compliance related activity to structured charges. The updated cost recovery model published in October 2022 includes set charges relating to compliance assessments and the monitoring of compliance with conditions or compliance undertakings. This means that registered higher education providers will know in advance how much a compliance assessment, or the monitoring of compliance with a condition or compliance undertaking, will cost.

On this basis, and as there had already been sufficient consultation on the cost recovery model, TEQSA considered that further consultation was not required in 2022.

In keeping with the cost recovery framework and guidelines, TEQSA will continue to consult closely with the sector on both the administrative arrangements for implementing cost recovery, and on the impacts on providers. The consultations will form the basis for adjustments to the model and possible subsequent revisions to the charges in the Charging Regulations and this instrument.

Commencement

The Instrument is a legislative instrument for the purposes of the Legislation Act 2003 and will commence on 1 January 2023.

Description of the provisions

Section 1

Section 1 of the instrument provides that the name of the instrument is the Tertiary Education Quality and Standards Agency (Registered Higher Education Provider Charge) Guidelines 2022.

Section 2

Section 2 provides that the Charging Guidelines will commence on 1 January 2023.

Section 3

Section 3 provides that the Charging Guidelines have been made under section 204 of the Act.

Section 4

Section 4 sets out definitions for the purpose of the Charging Guidelines.

Act: this definition provides that “the Act” is the Tertiary Education Quality and Standards Agency Act 2011.
Base component: this definition provides that the “base component” of the registered higher education provider charge is set out in subsection 5(2) of the Charging Regulations.
Charges Act: this decision provides that the “Charges Act” is the Tertiary Education Quality and Standards Agency (Charges) Act 2021.
Charging Regulations: this definition provides the “Charging Regulations” are the Tertiary Education Quality and Standards Agency (Charges) Regulation 2022
Compliance assessment: this definition provides that “compliance assessment” means an assessment commenced under section 59 or 61 of the Act.
Compliance component: this definition provides that the “compliance component” of the registered higher education provider charge is set out in subsection 5(4) of the Charging Regulations.
Compliance undertaking: this definition provides that “compliance undertaking” has the meaning provided in section 4 of the Charging Regulations.
Component: this definition provides that “component” means either the base component or the compliance component of the registered higher education provider charge.
Conditions: this definition provides that “conditions” means any conditions:
1. imposed on the registration of a registered higher education provider by TEQSA under subsection 10B(1) or 83(3) of the Education Services for Overseas Students Act 2000 or subsection 32(1) of the Act; or
2. imposed on the accreditation of a course of study by TEQSA under subsection 53(1) of the Act.
Primary course of study: this definition provides that a “primary course of study” is a course of study from which all of the subjects or units that comprise a related course of study are taken.
Registered higher education provider: this definition provides that “registered higher education provider” has the meaning provided in section 5 of the Act.
Registered higher education provider charge: the definition provides that the “registered higher education provider charge” means the charge imposed on a registered higher education provider by the Charges Act.
Related course of study: this definition provides that a “related course of study” is a course of study that is comprised entirely of subjects or units taken from another course of study offered by the same registered higher education provider.
TEQSA: this definition provides that “TEQSA” means the body established by section 132 of the Act.

Section 5

This section provides that, for the purposes of paragraphs 26C(2)(a) and (b) of the Act, and for each year after 2022, TEQSA must issue a written notice to each registered higher education provider who is liable to pay the registered higher education provide charge.

Subsection 5(1) provides that the notices issued by TEQSA must specify the year to which the notice relates, the amount of each component of the provider’s charge and the total amount of the provider’s charge for that year. Subsection 5(1) also provides that the notices must include an explanation of how each component of the provider’s charge was calculated, the day by which the charge is due (which must be at least 30 days after the notice is given) and the method or methods by which the provider must pay the charge.

Subsection 5(2) provides that a failure by TEQSA to give a registered higher education provider a notice does not affect the provider’s liability to pay the registered higher education provider charge imposed on the provider under the Charges Act.

Note 1 to subsection 5(2) explains that the registered higher education provider charge is imposed on registered higher education providers under the Tertiary Education Quality and Standards Agency (Charges) Act 2021 (Charges Act). Note 2 to subsection 5(2) explains that subsection 26C(1) of the Act requires each registered higher education provider, as a condition of registration, to pay the registered higher education provider charge.

Subsection 5(3) provides that a notice issued under subsection 5(1) does not need to be given to a registered higher education provider if the liability to pay the whole of the registered higher education provider charge is waived under section 7 of the Charging Guidelines.

Section 6

Section 6 of the Charging Guidelines sets out the circumstances in which the requirement to pay all, or part of the registered higher education provider charge is, or can be, waived.

Subsection 6(1) provides that, for the purposes of paragraph 26C(2)(f) of the Act, TEQSA may waive the requirement to pay the registered higher education provider charge or part of the charge where, in TEQSA’s opinion, special or unusual circumstances exist and these circumstances would cause the charge, or a part of the charge, to be unreasonable.

Subsection 6(2) provides that, in deciding whether to exercise its discretion under subsection 6(1), TEQSA must have regard to the policy objectives underlying the imposition of the registered higher education provider charge. Paragraph 6(2)(a) provides that the first objective TEQSA must have regard to is the objective of recovering the costs associated with TEQSA’s regulatory effort for non-application based activities that are not attributable to individual providers.

Paragraph 6(2)(b) provides that the other objective TEQSA must also have regard to when deciding whether to exercise its discretion under subsection 6(1) is the objective of recovering the costs associated with TEQSA’s regulatory effort in undertaking provider specific compliance activities. These activities include including investigations, compliance assessments and monitoring compliance by providers with conditions and compliance undertakings.

Subsection 6(3) provides that if TEQSA determines to waive the requirement to pay all or part of the registered higher education provider charge under subsection 6(1), TEQSA must issue the relevant registered higher education provider with a written notice. Paragraph 6(3)(a) provides that the notices issued to providers under subsection 6(3) must specify the part(s) of the registered higher education provider charge TEQSA has waived, or that the whole of the registered higher education provider charge has been waived. Paragraph 6(3)(b) provides that the notices must include the reasons why the part(s) or whole of the registered higher education provider charge has been waived.

Subsection 6(4) provides that certain circumstances are not special or unusual circumstances for the purposes of TEQSA making a decision under subsection 6(1) to waive the requirement to pay the whole, or a part of, the registered higher education provider charge:

Paragraph 6(4)(a) provides that a circumstance in which a registered higher education provider did not consent to the imposition of a condition or, the commencement of a compliance assessment or investigation, is not a circumstance that constitutes ‘special or unusual circumstances’ for the purposes of subsection 6(1);
Paragraph 6(4)(b) provides that a circumstance where a registered higher education provider does not agree with the outcome of a compliance assessment or investigation is not a circumstance that constitutes ‘special or unusual circumstances’ for the purposes of subsection 6(1); and
Paragraph 6(4)(c) provides that a circumstance where a registered higher education provider ceases to exist or ceases to be registered under Part 3 of the TEQSA Act is not ‘special or unusual circumstances’ for the purposes of subsection 6(1).

Subsection 6(5) provides that, for the purposes of paragraph 26C(2)(f) of the Act, in certain circumstances, the requirement to pay the part of the registered higher education provider charge set out in paragraph 5(4)(d) of the Charging Regulations is waived in relation to a particular course of study. Paragraph 5(4)(d) of the Charging Regulations provides that the compliance component of the registered higher education provider charge includes $3,350 for each condition, imposed under subsection 53(1) of the Act, that applied to the accreditation of a course of study at any time during the previous year.

Subsection 6(5) provides that the requirement to pay the part of the charge set out in paragraph 5(4)(d) of the Charging Regulations will be waived in relation a condition that applied to a particular course of study where:

that course of study is a related course of study, comprised entirely of subjects or units taken from another (primary) course of study offered by the same registered higher education provider;
the same condition applies to both the related course of study and the primary course of study; and
TEQSA is satisfied that the regulatory effort involved in monitoring compliance by the provider with the condition applied to the related course of study will be less than the amount set out in paragraph 5(4)(d).

Subsection 6(5) has been included to allow TEQSA to waive the part of the charge in paragraph 5(4)(d) of the Charging Regulations where the same condition has been applied to both the primary course of study and any related course(s) of study, and the regulatory effort involved in monitoring compliance with the condition imposed on a related course of study will be less than the amount of the charge otherwise payable as a result of that condition applying to each course.

Subsection 6(6) provides that, where the requirement to pay the part of the registered higher education provider charge set out in paragraph 5(4)(d) in relation to a particular related course of study is waived under subsection 6(5), TEQSA must issue the provider with a written notice. The notice must specify the details of the condition that applies to both the primary and related courses and the related course(s) of study for which the part of the registered higher education provider charge has been waived.

Subsection 6(7) provides that, for the purposes of paragraph 26C(2)(f) of the Act, the liability to pay the registered higher education provider charge for a particular year is waived if the provider’s registration is cancelled under the Act, or the provider has ceased to operate, prior to the time the when the amount of the registered higher education charge specified in a notice issued under section 5 has been paid.

Section 7

Subsection 7(1) provides that, where a provider’s registration ends after the provider has paid the amount set out in a notice issued under section 5 but before 1 January of the next year, TEQSA may refund a proportion of the base component of the registered higher education provider charge.

Subsection 7(2) provides that, where TEQSA has determined under subsection 7(1) to provide a refund, the amount refunded must be proportionate to the number of full calendar months that remain before 1 January of the following year. Subsection 7(2) sets out a formula for the calculation of the refund. The formula provides that the amount of the registered higher education provider charge paid by the former provider should be divided by 12 and that amount should then be multiplied by the number of full calendar months between the date when the former provider’s registration ended and 1 January of the following year.

Subsection 7(3) provides that, where TEQSA determines under subsection 7(1) to provide a refund, TEQSA must issue the former registered higher education provider with a written notice setting out the decision and how the amount to be refunded was calculated.

Section 8

Section 8 deals with the internal review of decisions made by TEQSA using the powers and functions set out in the Charging Guidelines.

Subsection 8(1) provides that, for the purposes of paragraph 26(2)(g) of the Act, a registered higher education provider may make a request that TEQSA reconsider:

a notice issued under section 5 (determining the value of the components of the registered higher education provider charge);
a decision made under subsection 6(1) not to waive the requirement to pay the registered higher education provider charge or part of the charge;
a decision made under subsection 6(5) not to waive the requirement to pay part of the registered higher education provider charge in relation to a condition applying to a course of study; or
a decision made under section 7 not to refund part of the base component of the registered higher education provider charge).

Subsection 8(2) provides that each of the above listed decisions is a “reviewable decision” for the purposes of section 8.

Subsection 8(3) provides that a request from a registered higher education provider to have a reviewable decision reconsidered must be in writing, must set out the reasons for the request and must be given to TEQSA in writing and within 14 days, or such longer period as TEQSA allows, after the day on which the provider received notification of the reviewable decision.

Subsection 8(4) provides that after receiving a request for the review of a reviewable decision, TEQSA must reconsider the decision and either confirm the original reviewable decision, vary the original decision, or set aside the original decision and substitute a new decision.

Subsection 8(5) provides that TEQSA must give the registered higher education provider written notice of TEQSA’s decision in response to the request for reconsideration (the internal review decision). Paragraphs 8(6)(a) and (b) provide that this notice must be given to the registered higher education provider within 7 days of the internal review decision being made and must contain a statement of the reasons for the internal review decision.

Paragraph 8(6)(c) provides that, if TEQSA decides to vary the original reviewable decision or set aside the original decision and substitute a new decision, the notice issued under subsection 8(5) must also include a new notice issued under the section relevant to the original decision. For example, if TEQSA reconsidered an original reviewable decision made under section 7 not to provide a proportionate refund and, after reconsidering the decision, TEQSA decided that the original reviewable decision would be set aside and replaced with a new decision to provide a refund, TEQSA would have to issue a new notice under subsection 7(3).

Paragraph 8(6)(c) also provides that where the new notice is issued after TEQSA decides to vary or set aside a notice issued under section 5, the new notice issued under section 5, setting out the amount of the provider’s registered higher education provider charge, must include a due date for payment that is at least 30 days after the provider is notified of the internal review decision.

Section 9

Section 9 provides that, for the purposes of paragraph 26C(2)(g) of the Act, an application may be made to the Administrative Appeals Tribunal for the review of an decision that has been confirmed, varied or set aside under section 8. In effect, a registered higher education provider can make an application to have an internal review decision reviewed by the Administrative Appeals Tribunal.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Tertiary Education Quality and Standards Agency (Registered Higher Education Provider Charge) Guidelines 2022

The Tertiary Education Quality and Standards Agency (Registered Higher Education Provider Charge) Guidelines 2022 (Charging Guidelines) are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of the Charging Guidelines is to create guidelines making provision for, or in relation to, matters set out in subsection 26C(2) of the Tertiary Education Quality and Standards Agency Act 2011 (TEQSA Act). These matters include:

The issuing of notices setting out the amount of the registered higher education provider charge;
When the registered higher education provider charge is payable;
The refund, remission or waiver of the registered higher education provider charge; and
The review of decisions made under the Charging Guidelines in relation to the collection or recovery of the registered higher education provider charge.

TEQSA’s new cost recovery model has necessitated the implementation of a new “registered higher education provider charge”. The charge is imposed by the Tertiary Education Quality and Standards Agency (Charges) Act 2021 (Charges Act). Section 26C of the TEQSA Act imposes a condition on the registration of all registered higher education providers that requires them to pay the registered higher education provider charge. The registered higher education provider charge is designed to recover the costs of the TEQSA’s sector risk monitoring and regulatory oversight activities.

Human rights implications

Right to education

The Charging Guidelines engage the right to education which is set out in Article 13 of the International Covenant on Economic, Social and Cultural Rights. The right to education recognises the important personal, societal, economic and intellectual benefits of education, and provides that secondary education in its different forms, including higher education, shall be made generally available and accessible to all by every appropriate means.

The Charging Guidelines facilitate the payment of the registered higher education provider charge. Payment of the registered higher education provider by registered higher education providers contributes to the Australian Government’s consolidated revenue fund. The contributions to this fund will ensure the Australian Government can fund TEQSA to carry out its regulatory and quality assurance roles in the higher education sector.

There are more than 1.6 million students currently studying higher education in Australia and, prior to the pandemic, the annual economic benefit to Australia from higher education as an export was estimated to be over $37 billion. The Charging Guidelines engage and promotes the right to education because it supports TEQSA’s work, including its ability to register providers and accrediting courses of study, which in turn promotes the objective of making quality education available and accessible to students both in Australia and who come from overseas to study.

The Charging Guidelines are compatible with the right to education.

Conclusion

This Charging Guidelines are compatible with human rights because they promote the protection of human rights.

_______________________ _______________________

Professor Peter Coaldrake Professor Joan Cooper

Chief Commissioner Commissioner

_______________________ _______________________

Adrienne Nieuwenhuis Stephen Somogyi

Commissioner Commissioner

Tertiary Education Quality and Standards Agency

Administered by Department of Education

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