The Smart and Skilled program for 2023-24 and its application process

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Overview of the Smart and Skilled program

Smart and Skilled is a NSW Government program that helps people get training in in-demand skills and industries. It’s a key part of the NSW vocational education and training (VET) system. Smart and Skilled gives eligible students:

• an entitlement to government-subsidised training up to and including Certificate III
• government funding for higher-level courses (Certificate IV and above) in targeted priority areas.

Smart and Skilled is comprised of several programs:

• Smart and Skilled Entitlement Foundation Skills
• Smart and Skilled Entitlement Full Qualifications
• Smart and Skilled Entitlement Apprenticeship and Traineeship Qualifications
• Smart and Skilled Targeted Priorities Full Qualifications
• Smart and Skilled Targeted Priorities Prevocational and Part Qualifications
• School Based Apprenticeships and Traineeships.

Approved Smart and Skilled training providers must: 

• deliver quality training
• adhere to Smart and Skilled guidelines and policies
• implement fee arrangements and 
• establish consumer protection processes.

More information can be found on the For Providers – Smart and Skilled page. The NSW Skills List identifies which qualifications are eligible for a government subsidy under Smart and Skilled.

The Smart and Skilled application

Smart and Skilled was introduced in 2015 and has been effective in delivering training in key qualifications. The last time RTOs had a broad opportunity to enter Smart and Skilled was in 2017.

The Smart and Skilled application process will ensure that Smart and Skilled providers deliver the best possible offerings to the market and meet industry needs. 

Through the Smart and Skilled application process RTOs have an opportunity to continue in, or enter for the first time, the NSW government-subsidised vocational education and training market.

The Smart and Skilled application process will determine which RTOs are suitable for a Smart and Skilled contract and financial allocations for 2023-24.

RTOs that apply will need to demonstrate that they can deliver quality training that meets industry needs and skills shortages.

The application process will require RTOs to provide information around:

• the eligibility of the RTO, including evidence of financial viability
• the operational structure of the RTO
• the quality of training provision including:
  • teaching and leadership practices
  • student-centred approach to training experience
  • individualised support for students, particularly students with a disadvantage and/or with an Aboriginal and/or Torres Strait Islander background
• the programs, regions and qualifications applied for including
  • previous student commencements numbers
  • the number of students expected to commence in 2023-24
• additional information around assessment practices and innovative approaches to training.

The information provided through the application stage will be competitively assessed by Training Services NSW. The assessment process has been designed to ensure Smart and Skilled funding is aligned to labour market needs and results in a choice of providers for students, while also lifting quality.

An overview of the application questions is provided in the following table, with the application questions split into four different components:

The Smart and Skilled application process

The Smart and Skilled application process includes three stages:

1. Application

The application stage is focused on eligibility requirements that RTOs must meet to be considered for a contract. It also collects information that will be used in the assessment and financial allocation stages.

2. Assessment

The assessment stage will use information from the application, and other information held by Training Services NSW, to determine which eligible applicants are suitable to access a contract and be considered for access to funding. Benchmarks will be applied at the assessment stage that must be exceeded in order for the application to proceed to the financial allocation stage. The scoring from the assessment stage will be passed through to the financial allocation stage.

3. Allocation

The allocation stage will use scoring from the assessment stage and other data to determine the RTOs that will be approved to deliver training for each Smart and Skilled program (excluding Part Qualifications), and will also determine the regions, qualifications and, where financial caps apply, the amount of that allocation.

Who can apply

All existing and prospective Smart and Skilled providers need to apply as part of a new application process in 2023-24.

The Smart and Skilled application is open to all eligible RTOs but there may be different access to programs depending on RTO type (for example currently only TAFE NSW and approved Adult and Community Education providers have access to the Entitlement Foundation Skills program). Interstate RTOs will only be able to apply to deliver training in targeted regions and qualifications identified by Training Services NSW. 

NSW Market Assessment 

The NSW Market Assessment is an analysis of occupational demand and training supply in NSW for use in the Smart and Skilled provider application process. The NSW Market Assessment highlights occupational markets which are aligned to labour market demand and foundation skills training needs.

Training Services NSW is publishing analysis from the NSW Market Assessment to assist RTOs in preparing their Smart and Skilled application for a 2023-24 Smart and Skilled contract. The NSW Market Assessment does not replace the NSW Skills List which continues to determine the full set of qualifications that can be funded through Smart and Skilled. Training Services NSW will consider any application from eligible RTOs for NSW Skills List qualifications.

The NSW Market Assessment also identifies the markets that interstate RTOs may apply for in the application process.

Features of the NSW Market Assessment

The NSW Market Assessment combines multiple data sources to identify the types and volume of training to address current and forecast labour market needs, maintain a competitive, high-quality training market, and provide students with a diverse range of training options across all regions of NSW.

The features of the NSW Market Assessment include: 

1. A comprehensive list of the occupational markets (qualifications and occupations in Smart and Skilled regions) and training pathways (full qualifications or apprenticeships/traineeships)
2. Indicators for the relative size of each market and where required training volumes are above current levels
3. Advice on which occupational markets are open to interstate RTOs interested in applying for Smart and Skilled funding.

In conjunction with the publishing of the NSW Market Assessment, Training Services NSW has classified RTOs as Established NSW RTOs or Interstate RTOs and will inform organisations of their classification.

An Established NSW RTO is:

• An RTO that holds a current Smart and Skilled Contract (and is not an interstate TAFE), or
• An RTO with its Principal Place of Business in NSW (as registered by ASIC or NSW Fair Trading), or
• An RTO with its Principal Place of Business not in NSW (as registered by ASIC or NSW Fair Trading) (and is not an interstate TAFE) and
  • The RTO’s yearly enrolments of NSW students is 40 or more, or
  • The RTO’s yearly enrolments of NSW students is 50% or more of the providers total yearly enrolments.

Aboriginal controlled RTOs will also be considered to be an Established NSW RTO.

An interstate RTO is an RTO that is not an Established NSW RTO and includes interstate TAFEs.

The Market Management Policy Part B refers to the ASIC principal place of business address in the definition of an Established NSW RTO. RTO Head Office Addresses listed training.gov.au are used to assess each RTO against the criteria.

The head office address of each RTO will be verified against the ASIC principal place of business address during the application process which may affect an RTO’s classification as either an Established NSW RTO or and Interstate RTO.

Interstate RTOs can only apply for the identified qualifications in the NSW Market Assessment.

How the NSW Market Assessment can help RTOs with their Smart and Skilled applications for 2023-24

The NSW Market Assessment provides an assessment of occupational markets based on qualification/occupation, region, and training pathway.  

Each RTO should identify the qualifications on their scope of registration that match the NSW Skills List and appear on the NSW Market Assessment. Interstate RTOs must also identify which occupational markets they may apply for, as this is limited to qualifications where NSW RTOs are unlikely to give enough supply for the full market need. 

RTOs can also use the NSW Market Assessment to identify opportunities to include in their application by considering the size of the market and/or whether Training Services NSW may seek to increase the number of enrolments. This could mean deciding to expand the qualifications you apply for or expand into a new region.

Delivery conditions attached to some qualifications 

Training Services NSW is adding conditions to 8 qualifications to better target them toward good outcomes for students. These qualifications will be flagged on version 13.3 of the NSW Skills List.

All providers who are approved to deliver these qualifications under Smart and Skilled will be required to adhere to these conditions. Conditions include improving connection to industry, aligning training to labour market needs and restricting student eligibility.

Superseded Qualifications

Some qualifications on the NSW Skills List may have recently been superseded by new qualifications (see NSW Skills List for all approved qualifications for the 2023-24 Activity Period). Where a qualification is replaced by a superseding qualification, the approved price of the superseding qualification under Smart and Skilled may be reviewed and updated while the application process is underway. Where price changes are made, they will be advised to providers before Smart and Skilled contract offers are made for 2023-24.

All providers who are approved to deliver these qualifications under Smart and Skilled will be required to adhere to these conditions. Conditions include improving connection to industry, aligning training to labour market needs and restricting student eligibility.

Improving connection to industry

The NSW Quality Framework describes how training providers can optimise their connections to industry. Training Services NSW expects that providers adhere to the framework especially with regards to improving educational outcomes for students.

Aligning Smart and Skilled training activity with labour market needs

Smart and Skilled training activity will be limited in some of the 8 qualifications to align with occupational projections. Training Services NSW will manage activity levels through the NSW Market Assessment process for approved Smart and Skilled providers.

Restricting Smart and Skilled eligibility

Eligibility to offer some qualifications is being restricted to ensure that they are being targeted towards the right cohorts. Restricted eligibility will be detailed in activity schedules.

Table 2 below details the selected qualifications and conditions that applies to them.

Request for under-supplied occupational markets process

After the application round closed on 2 December 2022, Training Services NSW has undertaken a comparison of the total applications received from RTOs for occupational markets against the NSW Market Assessment.

The gap analysis highlights where RTO capacity fell short of the level of supply and market diversity determined by the NSW Market Assessment. Some occupational markets require more RTOs to apply for additional commencement capacity to meet the projected labour market needs. Training Services NSW is asking eligible RTOs that submitted an application and paid the fee for the financial viability check to bid for additional training opportunities.

• Cycle 2 occupational markets

The gap analysis outlines a list of occupational markets (program, region, and qualification combinations). In some cases, this includes deeming a market newly eligible for interstate RTOs).

RTOs with the identified qualifications on their scope of registration who made an application in the initial round and did not already apply for the identified occupational market(s) will be invited to make a request in the second round.

The second-round process will not allow changes to the information provided in the initial application round. RTOs will not be able to amend previous responses to questions or occupational markets applied for.

This means:

An RTO will be able to make the following changes (only where aligned to the gap analysis results and their scope of registration):

• Add a new program to their application
• Add a new region to their application
• Add a new qualification to their application
• Add new combinations of the above to address the gaps identified

An RTO will not be able to make changes to the following in their initial application:

• Region details submitted
• Qualification details submitted
• Organisational details submitted
• An occupational market already included in their initial application, including the commencement capacity requested for that occupational market.

An RTO can choose which of the identified occupational markets they wish to make a request in the second round. If an RTO does not wish to make an additional request, the RTO is not required to do anything further.

An RTO whose scope of registration does not include at least one qualification identified in the gap analysis will not be invited to participate in the second round. The results from the gap analysis will be published in early December 2022.

On 14 December 2022, RTOs who applied in the first round and whose scope matches the gaps identified will receive a notification that they may make a request for the second round.

The re-opening period will be from 14 December to 20 December 2022.

Smart and Skilled application portal

The Smart and Skilled application portal is a new online application system that provides an end-to-end solution for the processing and managing of all Smart and Skilled contracts. The new system will provide a simple and seamless solution for the Smart and Skilled program including this application process, the corresponding assessment and future contracting.

The Smart and Skilled application portal will use the Australian Government Digital Identity System to verify users. Digital Identity is a safe, secure, and convenient way to prove who you are online. myGovID is the Australian Government’s Digital Identity app.

To access the Smart and Skilled Application portal, you will need:

• a Digital Identity, such as myGovID, with at least a Standard identity strength
• to link your Digital Identity to your organisation using Relationship Authorisation Manager (RAM)

For help visit myGovID page and the RAM page.

For information and how to acquire a Digital Identity, visit the Digital Identity page.

Visit our portal information page.

User Guides:

• Smart and Skilled application portal RTO administration - User Guide
• RTO Login - myGovID - User Guide
• Completing an application in the Smart and Skilled application portal - User Guide

Eligibility criteria

To be eligible for the Smart and Skilled Program, an RTO must:

• be registered with the Australian Skills Quality Authority (ASQA)
• have a scope of registration that includes qualifications on the current NSW Skills List (i.e. the list of government-subsidised accredited courses and qualifications) or have a skills set or explicitly listed units of competency associated with a qualification listed on the NSW Skills List
• pass a financial viability check.

An RTO will not be eligible if it has had:

• its registration refused, cancelled, or revoked under the National Vocational Education and Training Regulator Act 2011 in the last 5 years
• its Smart and Skilled Contract or other Commonwealth or State Government funding contract or agreement terminated for non-compliance and/or unsatisfactory performance in the last 5 years.

Eligibility will be checked as the first step in the application process. The Smart and Skilled application system will use data from training.gov.au to assess an RTO’s eligibility.

Before starting a Smart and Skilled application an RTO will also need to ensure that their ASQA registration is up to date, details are current and correct on the Training website and the RTO’s principal address is what is registered with Australian Securities and Investments Commission (ASIC). All eligible RTOs, including existing Smart and Skilled providers and all RTOs approved to deliver training and assessment in NSW, are encouraged to apply to become a Smart and Skilled provider for 2023-24.

Current Smart and Skilled providers with a High Performing Provider classification will still be required to apply for allocation purposes. High Performing Providers will only be assessed for allocation purposes and will continue to maintain their current classification status for their contract period.

Interstate RTOs are encouraged to apply if they plan to deliver in priority NSW training areas/market(s) as determined by the Smart and Skilled market assessment.

Assessment process

Training Services NSW will assess applications through a competitive process. A RTO will be assessed on its:

• response to eligibility criteria, including evidence of financial viability
• operational structure
• quality of training provision including its:
  • teaching and leadership practices
  • student-centred approach to training experience
  • approach to individualised support for students, particularly students with a disadvantage or with an Aboriginal and/or Torres Strait Islander background.

The assessment approach has been designed to deliver a consistent, objective, fair and transparent evaluation of all applications, ensuring that successful RTOs are appropriately qualified and capable of meeting the Smart and Skilled Program eligibility criteria and guidelines.

This approach will involve an eligibility check, operational and qualification benchmark assessment, sensitivity analysis and due diligence, all of which will be based on responses received from applicants within the application portal, alongside automated data collected from training.gov.au (TGA), NCVER, and information held by Training Services NSW.

RTOs will be assessed against key objectives that are aligned with the Smart and Skilled policies to ensure funding is directed towards organisations that can deliver high quality training that helps people get qualifications in in-demand skills and industries.

A number of questions within the Smart and Skilled application portal have automated scoring and predetermined weightings that will be used to assess RTOs against the benchmarks. The scores will be used for determining access to a contract and as part of determining funding allocations and the occupational markets a provider is approved to deliver.

Other questions in the application will provide context through qualitative information in order to conduct a sensitivity analysis if an RTO’s score falls just below a benchmark. The sensitivity analysis will be used to determine if the RTO should be deemed to have met the requirements to be eligible for a contract.

The due diligence process will take a risk-based approach to review RTOs that are flagged with concerns. For example, this may be around factors such as quality assurance, financial viability, quality outcomes, or other risk factors that indicate an RTO may not be effective as a Smart and Skilled provider. Depending on the outcome of this process RTOs may be found ineligible for a contract.

The benchmarks have been derived via a consensus process between subject matter experts in Training Services NSW and an independent assessment expert to establish both a minimum score and a preferred score for each component of the application. Training Services NSW reserve the right to adjust the benchmarks after assessing applications to achieve an outcome that delivers quality but with enough RTOs to ensure coverage of different markets across NSW. Any such change will be documented and approved by the Training Services NSW VET Market Management Governance Group.

There will be different access to programs depending on RTO type. 

Financial viability assessment

As part of the Smart and Skilled application process, all RTOs are required to demonstrate financial viability as part of the application process. In the assessment of financial performance, a view is gathered of the extent to which RTOs are financially viable through assessment of financial statements. This will ensure that future Smart and Skilled providers have the financial resources to meet their obligations under the contract throughout 2023-24.

RTOs are required to pay for their own assessments which will cost $385 (including GST) per application plus credit card fee of 1.6%. 

For the Smart and Skilled provider application 2023-2024, all RTOs must be assessed as financially viable. 

RTOs will be required to submit financial statements at a website created specifically for the Smart and Skilled Provider Application that opens on 1 November 2022. RTOs will be directed to provide payment during the application process and submit the required financial statements and associated documentation to Equifax Australasia Credit Ratings Pty Ltd (Equifax, trading as Corporate Scorecard) via a secure webpage to enable a financial viability assessment to be properly carried out. 

The process requires the following documents: 

• Financial statements for the RTO 
• A signed Authorised Officer Declaration that the financial viability assessments are a true representation of the RTO’s financial position 
• Deed of Cross Guarantee if applicable.

All information provided will be treated in strict confidence. Further information can be found in the Frequently Asked Questions section.

For this round of applications, Training Services NSW will accept financial statements that have been audited or externally prepared but audited financial statements are preferred. Financial statements submitted will undergo a financial and risk assessment to determine financial viability. 

RTOs with audited financial statements that are assessed as financially viable will be given an unconditional pass under the financial viability process. The Training Services NSW considers externally prepared financial statements to bear a higher risk than those that have been audited. RTOs that submit externally prepared financial statements, and are assessed as financially viable, will undergo an additional due diligence process that will assess overall risk. Training Services NSW retains absolute discretion in its assessment of risk as to whether an RTO will be eligible for a contract.

RTOs are required to submit a minimum of two full years of finalised financial statements of the RTO or the corporate group which it is part of (including the notes to the accounts and the auditor's reports if available). These must be for the RTO’s latest reported financial year, ending 31 December 2021 or 30 June 2022, and the previous financial year

Training Services NSW is moving towards having audited financial statements as a condition of the Smart and Skilled contract.

Other information will be requested as part of the application process. This includes: 

• Total dollar value of all Government subsidised training payments over the last financial year 
• Percentage of subsidised training revenue to total revenue over the last financial year 
• Selecting the State in which your main operating address is located 

• Does your organisation currently have operations in NSW? 
• Details of all sources of funding over the last 12 months 

Note that non-incorporated RTOs will need to provide details of all directors including date of birth and residential address. 

Further information

Before starting an application for the Smart and Skilled program, please read the following documents: 

• Smart and Skilled application terms and conditions
• Smart and Skilled contract operating guidelines
• Smart and Skilled contract 2023-24
• Smart and Skilled application portal RTO administration User Guide
• NSW Market Assessment
• Market Management Policy (Part B)
• NSW RTO Classification List

       User Guides:

• Smart and Skilled application portal RTO administration - User Guide
• RTO Login - myGovID - User Guide
• Completing an application in the Smart and Skilled application portal - User Guide

Training Services NSW, at its sole discretion, and at any stage of the application process, do all or any of the following:

• require additional information from an applicant
• change the scope or the requirements of the application process
• vary, amend (including by replacement) or terminate the application process
• re-open an application after the closing date, provided it doesn’t give the applicant an advantage over other applicants

Training Services NSW will consider and exercise all or any of the above options in a way that is fair and equitable to the applicants.

Frequently asked questions

Have a question? View our FAQ page. 

Any remaining questions

If you have reviewed:

• the Smart and Skilled provider application page
• the Smart and Skilled FAQ page 
• the Smart and Skilled application portal page 
• the user guides and other supporting documentation provided

and still have outstanding questions, concerns or a complaint, please send a detailed email  to SmartandSkilled.Application@det.nsw.edu.au.