Independent Schools Queensland (ISQ) welcomed the opportunity to make a submission to the Senate Education and Employment Legislation Committee’s inquiry into The Australian Education (Direct Measure of Income) Bill 2020. The Bill gives legislative effect to a new Direct Measure of Income (DMI) methodology for determining a non-government school community’s Capacity to Contribute (CTC) to the costs of schooling. The new DMI methodology represents a major change to the needs-based school funding model, which will replace the current Socio-Economic Status (SES) methodology to determine CTC. SES has been used in Australian Government recurrent funding models for independent schools since 2001. SES was generally accepted by independent schools as an appropriate measure.