Research Block Grants New Arrangements - Allocation Calculation Methodology

Research block grants (RBG) are allocated based on the relative performance of higher education providers (HEPs) in research income generation and higher degree by research (HDR) completions. 

On this page

Funding drivers:

The funding drivers for RBG allocations from 2017 are described in the National Innovation and Science Agenda (NISA) and the Review of Research Funding and Policy Arrangements.

In summary:

  • research income and higher degree by research (HDR) student completions will drive all RBG funding from 2017
  • research publication counts have been removed from the funding formulae along with HDR student load and the SRE funding moderators—Excellence in Research for Australia (ERA) ratings and transparent costing.

Weightings:

Indigenous HDR completions have higher weightings compared to non Indigenous completions. All HDR student completion weightings are described below.

 

Non-Indigenous

Indigenous

Research Doctorate high-cost

4.7

9.4

Research Doctorate low-cost

2

4

Research Masters high-cost

2.35

4.7

Research Masters low-cost

1

2

 

Transitional Arrangements:

In order to ensure that universities can continue to meet existing commitments and adjust to the new incentives, transitional arrangements will apply over the first four years, 2017 to 2020: 

  • RSP—a safety net for RSP funding will be applied to ensure that no university receives less than 95 per cent of its funding for the prior year, indexed 
  • RTP—25 per cent of RTP funding will be determined by applying new funding formulae, with the remaining 75 per cent being determined based on the previous year’s allocation.

RSP allocation calculations:

RSP allocations are calculated through the three following steps:

  1. calculate basic grant amount (BGA)
  2. apply transitional arrangements
  3. apply rounding.

Step 1: Calculating the basic grant amount

Step 1.1—For each Grant Year a HEP’s share of COMPETITIVE income is calculated by the sum of that HEP’s Category 1 income for the two most recent years divided by the sum of Category 1 income for all eligible HEPs for the two most recent years. 

Step 1.2—For each Grant Year a HEP’s share of ENGAGEMENT income is calculated by the sum of that HEP’s Category 2, 3 and 4 income for the two most recent years divided by the sum of Category 2, 3 and 4 income for all eligible HEPs for the two most recent years. 

Step 1.3—A HEP’s allocation from Funding Pool A is calculated by multiplying one half of Funding Pool A by the HEP’s share of COMPETITIVE income and one half of Funding Pool A by the HEP’s share of ENGAGEMENT income, and then summing these two funding amounts.

Step 1.4—A HEP’s allocation from Funding Pool B is calculated by multiplying Funding Pool B by the HEP’s share of ENGAGEMENT income.

Step 1.5—A HEP’s BGA is calculated by summing its allocations from Funding Pool A and Funding Pool B.

The following formula is used to calculate the basic grant amount:

The following formula is used to calculate the basic RSP grant amount

Worked example for calculating a HEP’s BGA

Worked example for calculating a HEP’s BGA

Step 2: Applying the transitional safety net

The transitional safety net ensures that no HEP’s RSP Grant Amount falls below 95 per cent of the equivalent amount received for the previous Grant Year. 

Step 2.1—calculate the indexation component by dividing the RSP Funding Pool for the Grant Year by the RSP Funding Pool for the previous Grant Year. For 2017 only, the RSP Funding Pool for the previous Grant Year will be the sum of allocations for all eligible HEPs in 2016 from the Joint Research Engagement, Research Infrastructure Block Grants and Sustainable Research Excellence programs.

Step 2.2—index each HEP’s RSP Grant Amount for the previous Grant Year by multiplying it by the indexation component calculated in Step 1. For 2017 only, each HEP’s RSP Grant Amount for the previous Grant Year will be the sum of funding received by that HEP in 2016 from the Joint Research Engagement, Research Infrastructure Block Grants and Sustainable Research Excellence programs.

Step 2.3—For each HEP calculate the difference between its RSP Grant Amount for the Grant Year and its indexed Grant Amount for the previous Grant Year.

Step 2.4—For each HEP having a positive value calculated in Step 3, this value is contributed by that HEP to the safety net pool.

Step 2.5—For each HEP having a negative value calculated in Step 3 and whose BGA is less than 95 per cent of its indexed Grant Amount for the previous year, the amount required to bring its BGA up to 95 per cent of the indexed RSP Grant Amount for the previous Grant Year is taken from the safety net pool. 

For each HEP whose BGA is more than 95 per cent and less than 100 per cent of its indexed Grant Amount for the previous year there is no adjustment.

Step 2.6—Once all applicable HEPs in Step 5 have been topped up to 95 per cent of their indexed RSP Grant Amount for the previous Grant Year, the residual remaining in the safety net pool is redistributed. Any residual funds in the safety net pool are returned to those HEPs that contributed to the safety net pool in the same proportion in which they contributed. For example, if a HEP contributed 10% of the safety net pool, that HEP will receive 10% of the residual safety net pool funds.

Step 2.7—Each HEP’s final RSP Grant Amount is equal to its BGA, minus any contributions to the safety net, plus any top ups to 95 per cent of the previous year’s Grant Amount from the safety net pool, plus any distributions from residual funds remaining in the safety net pool.

Worked example for calculating the impact of the transitional safety net

Worked example for calculating the impact of the transitional safety net

Step 3: Applying rounding to calculate the final grant amount

The final RSP grant amount is calculated by rounding down the post safety net grant amounts 

Step 3.1—The post safety net RSP grant amounts are rounded down to the nearest dollar.

Step 3.2—A Cents Rounded Amount is calculated for each HEP by subtracting the rounded amount from the post rounded amount

Step 3.3—Each HEP is ranked in order from highest to lowest based on their Cents Rounded Amount 

Step 3.4—The sum of all HEP’s Cents Rounded Amounts calculated becomes the number of HEPs that will be topped up an additional dollar to the amounts calculated in. Extra dollar is added to pre rounded amounts of the HEPs as per their ranking. This is the final RSP grant amount.

RTP allocation calculations

RTP allocations are calculated through the three following steps:

  1. calculate basic grant amount (BGA)
  2. apply transitional arrangements
  3. apply rounding

Step 1: Calculating the basic grant amount

Step 1.1—Weighted student completions for a HEP and all eligible HEPs are calculated by multiplying the Indigenous and Non- Indigenous student completions by their respective weightings.

Step 1.2—For each Grant Year a HEP’s share of COMPLETIONS is calculated by the sum of that HEP’s weighted HDR student completions for the two most recent years divided by the sum of weighted HDR student completions for all eligible HEPs for the two most recent years. 

Step 1.3—For each Grant Year a HEP’s share of COMPETITIVE income is calculated by the sum of that HEP’s Category 1 income for the two most recent years divided by the sum of Category 1 income for all eligible HEPs for the two most recent years. 

Step 1.4—For each Grant Year a HEP’s share of ENGAGEMENT income is calculated by the sum of that HEP’s Category 2, 3 and 4 income for the two most recent years divided by the sum of Category 2, 3 and 4 income for all eligible HEPs for the two most recent years. 

Step 1.5—The HEP’s BGA for a Grant Year is calculated by summing the following components: 

(1) 50 per cent of the Funding Pool multiplied by the share of COMPLETIONS; and

(2) 25 per cent of the Funding Pool multiplied by the share of COMPETITIVE; and

(3) 25 per cent of the Funding Pool multiplied by the share of ENGAGEMENT.

The following formula is used to calculate the basic grant amount

The formula for calculating each HEP’s Basic Grant Amount for the Grant Year

Worked example for calculating a HEP’s BGA

Worked example for calculating a HEP’s BGA

Weightings are applied in relation to the level of a degree, the cost of a degree and the nature of the student undertaking the degree. These weightings change the relative value of a completion and its financial reward for a HEP in the RTP allocation formula. The weightings for the level and cost of a degree have been retained from the APA, IPRS and RTS programs. The weightings for Indigenous students are new and implement a key recommendation from the Review of Australia’s Research Training System undertaken by the Australian Council of Learned Academies. 

Research Doctorate completions are weighted at twice the value of Research Masters completions in recognition of the cost of supporting a student for a longer period. High-cost course completions are weighted at 2.35 times the value of low-cost course completions in recognition of the higher costs incurred in supporting students in those courses. Completions by Indigenous students are weighted at twice the value of non-Indigenous student completions to provide a financial incentive to boost the number of Indigenous students completing HDRs.

The eight combinations of HDR student completions and their weightings are: 

  • Non-Indigenous high-cost Research Doctorate completions are weighted at 4.7
  • Non-Indigenous high-cost Research Masters completions are weighted at 2.35
  • Non-Indigenous low-cost Research Doctorate completions are weighted at 2.0
  • Non-Indigenous low-cost Research Masters completions are weighted at 1.0
  • Indigenous high-cost Research Doctorate completions are weighted at 9.4
  • Indigenous high-cost Research Masters completions are weighted at 4.7
  • Indigenous low-cost Research Doctorate completions are weighted at 4.0
  • Indigenous low-cost Research Masters completions are weighted at 2.0

The total WSC for a HEP and for all eligible HEPs is calculated by multiplying the number of completions for each type by the relevant weighting, and summing these values.

Worked example for weighted HDR student completions (WSC)

Step 2: Applying the transitional arrangements

Step 2.1—calculate a HEP’s prior year’s RTP share by dividing its RTP Grant Amount for the prior year by the sum of RTP Grant Amounts to all eligible HEPs in the prior year. For the 2017 Grant Year only, amounts for the year prior to the Grant Year for the HEP and all HEPs are equal to the amounts received in 2016 under the former APA, IPRS and RTS programs.  

Step 2.2—the HEP’s RTP Grant Amount for the 2017, 2018, 2019 and 2020 Grant Years is calculated by summing: 

  1. 75 per cent of the Funding Pool multiplied by the HEP’s prior year RTP Share; and
  2. 25 per cent of the HEP’s BGA.

Worked example for calculating a HEP’s 2017, 2018, 2019 and 2020 RTP Grant Amounts

 

Worked example for calculating a HEP’s 2017, 2018, 2019 and 2020 RTP Grant Amounts

Step 3: Applying rounding to calculate the final grant amount

The final RTP grant amount is calculated by rounding down the post safety net grant amounts 

Step 3.1—The post safety net RTP grant amounts are rounded down to the nearest dollar.

Step 3.2—A Cents Rounded Amount is calculated for each HEP by subtracting the rounded amount from the post rounded amount.

Step 3.3—Each HEP is ranked in order from highest to lowest based on their Cents Rounded Amount. 

Step 3.4—The sum of all HEP’s Cents Rounded Amounts calculated becomes the number of HEPs that will be topped up an additional dollar to the amounts calculated in. Extra dollar is added to pre rounded amounts of the HEPs as per their ranking. This is the final RTP grant amount.