Nominal hours are used by State and Territory Governments to determine the amount of money paid to an RTO when they deliver government subsidised training. Nominal hours are not the same thing as the number of hours of contact between a learner and their trainer. These contact hours are usually less than the nominal hours, and can be substantially less.
Using nominal hours to calculate payment to an RTO
Nominal hours are about money, not time. They are used to calculate how much money an RTO receives from the government. The government assigns a ‘nominal hour’ for each unit of competency. And a dollar amount per hour is allocated for each qualification that the government is willing to subsidise.
The following subsidy rates are from the 2020 Victorian Funded Course List: 
- $7.00 per nominal hour for Certificate I in Skills for Vocational Pathways qualification
- $3.00 per nominal hour for Certificate II in Business qualification
- $14.00 per nominal hour for Certificate III in Carpentry qualification
- $6.50 per nominal hour for Certificate IV in Training and Assessment qualification
- $4.00 per nominal hour for Diploma of Marketing and Communication qualification
Each State and Territory Government determines their own subsidy rate. Therefore, the subsidy rate for a particular qualification can vary in different jurisdictions. And a qualification could be subsidised by one State Government, but not by another.
The government usually sets a limit for how much they are willing to pay an RTO for delivering government subsidised training. For example, the Victorian Government sets the minimum payable hours for the TAE40116 Certificate IV in Training and Assessment qualification at 333, and the maximum payable hours at 350. 
- The minimum payment is 333 hours x $6.50 per hour = $2,164.50
- The maximum payment is 350 hours x $6.50 per hour = $2,275.00
Their is a range in nominal hours for a qualification because different electives can be selected. And nominal hours are assigned to individual units of competency. The following shows three units of competency that can be selected as the elective unit for the TAE40116 Certificate IV in Training and Assessment qualification. Each has a different number of nominal hours: 
- TAEDEL301 Provide work skill instruction is allocated 40 nominal hours
- TAEDEL404 Mentor in the workplace is allocated 30 nominal hours
- TAEASS301 Contribute to assessment is allocated 10 nominal hours
The above examples have been kept simple by referring to information from one State Government. The aim is to convey an understanding of the funding principles based on nominal hours. If the Victorian Government information is not relevant to you, then please refer to information provided by the State or Territory Government that is applicable.
Nationally agreed nominal hours
Victoria was the first State or Territory Government that implemented market-based pricing for government subsidised training. It has published nominal hours in Victorian Purchasing Guides. 
In recent years, nationally agreed nominal hours have been established for RTOs when reporting ‘nominal hours’ in their AVETMISS submissions. 
An RTO may need to report different ‘nominal hours’ when delivering training under a funding contract compared with the ‘nominal hours’ reported via AVETMISS. Nationally agreed nominal hours may be different to nominal hours set by State or Territory Government. The following is an example comparing the Victorian nominal hours with the nationally agreed nominal hours for the TAE40116 Certificate IV in Training and Assessment qualification.
In the above example, it shows that the nominal hours set by the Victorian Government is the same as the nationally agree nominal hours. If an RTO, delivers the TAE40116 Certificate IV in Training and Assessment qualification under a Victorian Government funding contract, it can be paid $2,210.00 (340 hours x $6.50 per hour). This is $65.00 short of the maximum payment for this qualification in Victoria.
Nominal hours and contact hours differ
Nominal hours is about money, not time. It has very little to do with how much time is allocated to the delivery of training and assessment services. Contact hours or the number of training days is determined by an RTO. This information will be documented in the RTO’s Training and Assessment Strategy (TAS). The amount of time allocated for training and assessment activities will be specified and approved by the regulator before the qualification is added to the RTO’s scope of registration.
Contact hours or training days are usually less than the nominal hours, and can be substantially less. Learners can raise concerns when they compare nominal hours with actual contacts hours. They may see ‘nominal hours’ stated on the Training Plan at the commencement of their training program Learners do not, nor should they need to, understand that nominal hours are about funding. We can confuse learners if we try to explain that ‘nominal hours’ is not about ‘hours’ but about ‘money’.
Nominal hours are about money, not time. Nominal hours are used to calculate how much money and RTO gets paid for delivering government subsidised training.
Volume of learning must also be understood to fully determine actual hours associated with delivering training and assessment services. This includes understanding ‘supervised hours’ and ‘unsupervised hours’.
Who said VET was simple to understand?
 Victorian Funded Course List https://www.education.vic.gov.au/training/providers/funding/Pages/fundedcourses.aspx accessed 17 November 2020
 Victorian Purchasing Guide for the TAE Training Package https://www.education.vic.gov.au/Documents/training/providers/rto/TAE-training-and-education-vpg.pdf accessed 17 November 2020
 Victorian Purchasing Guides https://www.education.vic.gov.au/training/providers/rto/Pages/purchasingguides.aspx accessed 17 November 2020
 Nationally agreed nominal hours https://www.ncver.edu.au/rto-hub/statistical-standard-software/nationally-agreed-nominal-hours accessed 17 November 2020
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Australia’s VET system
Australia’s vocational education and training (VET) system is complex and forever changing. People studying for their TAE40116 Certificate IV in Training and Assessment qualification may find useful information on this website. Tap or click on the following ABC logo to find out more.
This article supplements the TAE Resources that have been developed by On Target Work Skills.
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