20 Hours ECE for ECE services
Below is information about the 20 Hours ECE funding for early childhood services. 20 Hours ECE funding reduces cost barriers so that more children can benefit from participation in ECE (Early Childhood Education).
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Early learning services can choose to access 20 Hours ECE funding if they are eligible. If they do access this funding, there are requirements that they must meet.
- Budget 2023 changes
- Type of Funding
- Funding Rates
- Children enrolled are more than one ECE service or kōhanga reo
- Fees and 20 Hours ECE
- Parents who pay the wages of a home-based educator
- Optional charges
- Casual or conditional enrolments
- For services to opt out of 20 hours ECE
- If parents opt out
- Information for parents
- Further information and resources
Budget 2023 made changes to the 20 Hours ECE subsidy. The changes included extending the subsidy to include two-year-olds, increasing the subsidy rate and introducing three new funding conditions.
More about Budget 2023 changes to 20 Hours ECE subsidy
The new funding conditions are that services that are opted into 20 Hours ECE will be required to:
- set any fees by the hour for two to five-year-old children (as opposed to daily or weekly) – and show 20 Hours ECE hours as $0 per hour,
- publicly promulgate their fees, and
- provide the Ministry with fee schedule data.
These changes take effect from 1 March 2024. The Funding Handbook will be formally updated at that time to reflect the changes.
However, to give the sector time to understand the changes and prepare, the updated chapter of the Funding Handbook is available here now. This is for reference only and does not come into effect until 1 March 2024.
The Ministry is also working with a sector Technical Advisory Group to develop a guidance document for services on the above changes. It will be available around the end of September, on this web page.
- Updated chapter 4 of the Funding Handbook - for reference only [PDF, 241 KB]
- Updated glossary from Funding Handbook - for reference only [PDF, 1.1 MB]
20 Hours ECE is a higher rate of funding based on the full average cost of providing ECE to the regulated standard.
Under this programme, the government fully funds ECE for up to six hours a day and 20 hours per week for eligible children.
While it is not compulsory, all licensed ECE services and kōhanga reo can offer it.
For children who are eligible to receive the funding, your ECE service or kōhanga reo will receive the 20 Hour funding rate instead of the usual ECE funding subsidy rate.
- For children receiving 20 Hours ECE who attend more than 20 hours per week, Plus 10 ECE is the funding rate for up to 10 further hours per week. It is the same rate as the usual ‘two and over’ rate.
- Combining 20 Hours ECE with Plus 10 ECE gives a maximum of six hours a day and 30 hours a week to all eligible children, in line with other ECE funding subsidies.
For information on funding rates, see Appendix 1 of the ECE Funding Handbook.
All three, four and five-year-old children enrolled at an ECE service or kōhanga reo that offers 20 Hours ECE are eligible.
- Entitlement begins at age three and ends when attendance at school starts.
- The final day that can be claimed as 20 Hours ECE is the day before a child’s sixth birthday.
Parents need to have signed the 20 Hours ECE attestation on their child’s enrolment form before it can be claimed. It cannot be claimed retrospectively.
Parents must be able to choose how they allocate 20 Hours ECE for their child, up to the maximum of six hours per day and 20 hours per week.
Parents are able to split the hours between two or more ECE services or kōhanga reo.
- Parents attest on the enrolment forms to their child receiving no more than six hours per day, with a total of no more than 20 hours of 20 Hours ECE per week.
- 20 Hours ECE can be split into amounts that are less than an hour. In one day, for example, a child may receive 2.5 hours at one service and 3.5 hours at another.
The ECE service or kōhanga reo providing 20 Hours ECE is responsible for ensuring parents do not pay extra fees.
Fees cannot be charged for hours claimed as 20 Hours ECE. This applies whether parents are paying a service provider or a home-based educator. If this happens, parents must be fully reimbursed.
Fees cannot be charged:
- for a public holiday when a child was usually enrolled on that day and 20 Hours ECE would normally have been claimed
- for administering 20 Hours ECE
- as an extra fee for an enrolled child who is moving to 20 Hours ECE.
Fees can be charged for additional hours of enrolment outside of 20 Hours ECE.
Usual enrolment fees or waiting list fees can be charged for children who will be using 20 Hours ECE at your ECE service or kōhanga reo. These fees must apply to all children, not just those receiving 20 Hours ECE. You must also ensure that these fees do not prevent children from accessing 20 Hours ECE.
Parents can be asked to pay optional charges for hours claimed as 20 Hours ECE. Donations may also be requested. See the ‘Optional Charges’ and ‘Donations’ sections below.
Parents cannot be charged a fee for hours that are claimed as 20 Hours ECE. This applies whether they are paying the service provider or the educator. If this happens, parents must be fully reimbursed.
Some ECE services and kōhanga reo may want to offer, or parents may wish to access, aspects of education and care that are over and above regulatory standards. Parents must have a choice about whether they want to pay for the additional service, item or activity covered by the optional charge. They must be informed in writing that agreeing to the optional charge is not compulsory and they must not be penalised if they choose not to pay an optional charge.
An optional charge may be requested for a specific one-off or ongoing purpose that:
- is for the care and education of the child
- is above what is required by the regulations
- can be separated out and measured.
Optional charges can only be requested for:
- aspects of provision that are not required by regulation
- additional staff beyond the minimum regulated adult/child ratios
- items that parents may either provide for their children or pay the ECE service or kōhanga reo to provide.
Optional charges should reflect the real and actual costs of the additional service, item or activity.
Examples of services, items or activities over the regulated requirements may include:
- specific teaching resources such as a dance or music teacher
- excursions and entrance fees (see also ‘Optional charges for excursions’ below)
- sunscreen lotion
- clothing items such as sun hats
Optional charges cannot be a condition of initial or continued enrolment, or requested for:
- aspects of provision that are required by regulation
- general contributions towards the cost of high quality education and care provided by the service or due to the service being well regarded
Recording a parent’s agreement to pay optional charges
You must record a parent’s agreement to pay an optional charge on the Enrolment Agreement Form [DOCX, 44 KB](external link). This must be signed and dated by the parent.
The optional charges section of the form must:
- list the specific services, items or activities, and their costs, that are covered by the optional charge
- advise parents that payment of optional charges is voluntary and there is no penalty for non-payment
- advise that if parents agree to pay an optional charge payment can be enforced or the additional services, items or activities covered by the optional charge may be withdrawn
- indicate how long the agreement to pay the optional charge will last
- indicate how the parent can change their agreement to pay the optional charge.
If parents do not agree to pay an optional charge
Optional charges are not compulsory. By choosing not to pay an optional charge, parents are agreeing not to have access to that additional service, item or activity.
Giving parents a chance to change their minds about paying an optional charge
Reasonable opportunities must be provided for parents to review their decisions regarding optional charges. What is reasonable will differ, but in most cases parents should have at least one opportunity to change their minds about paying optional charges.
Either party may initiate a change to the agreement, but both parties must agree on the changes. Any change to the agreement on optional charges is a change to the enrolment agreement.
If parents stop paying optional charges they had agreed to pay
Payment can be enforced as for any other fee, or the additional services, items or activities covered by the optional charge can be withdrawn.
Optional charges and the Ministry of Education
ECE services and kōhanga reo can set their own optional charges. It is good practice to talk to parents and check their willingness to pay.
The Ministry of Education would only become involved if a parent is being charged fees for 20 Hours ECE, an optional charge does not meet the criteria, or if parents are compelled to pay optional charges they have not agreed to in writing.
Optional charges for excursions
Type of Excursion
Outings that parents agree to at the time of their child’s enrolment.
Outings that parents agree to prior to the excursion or outing taking place.
- In general, regular excursions are part of an ongoing planned and consistent routine of education and care and should not incur an optional charge unless there is a direct cost associated with the activity itself, such as an entry fee.
- A request for a transport fee for a regular excursion could be considered if travel is required, but should not be requested if the activity is within a reasonable walking distance.
- If a parent with a child in home-based ECE has requested that the child be taken to a specific activity (such as dance lessons) on a regular basis, then an optional charge could be requested for both the activity (if not already paid for by the parent) and the transport.
- Special excursions are not part of the planned and consistent routine of education and care. Any direct costs associated with the activity and associated transport can be the subject of an optional charge.
- An optional charge should only be requested for excursions if:
- there is a direct cost associated with the excursion (e.g. an entry fee)
- travel is required to get to the destination, specifically any distance greater than what could be considered reasonable by walking.
- An optional charge for an excursion must be for the education and care of the child, and must be able to be separated out and measured.
- Costs must be itemised so parents can see how the optional charge is to be spent. Requesting a nominal hourly rate for unspecified excursions and transport does not meet the intent of an optional charge.
- Optional charges can be requested at any time after enrolment. Therefore if requested at the time of planning the excursion, the charge can reflect real and actual costs.
Optional charges for administering wages for home-based educators
A wage administration service can be separated out and measured. However, it is a service unrelated to the education and care of the child and sits outside the regulatory framework. Therefore, an optional charge cannot be requested for wage administration.
If a parent wishes to use (and pay for) a wage administration service it must be agreed to on the enrolment form separately from 20 Hours ECE.
Optional charges for home management
While home management is a service that can be separated out and measured, it is a service that is unrelated to the education and care of the child and sits outside the regulatory framework. Given this, an optional charge cannot be requested for home management.
Any fee sought for clearly specified home management duties that are not education and care is a matter between parents, the nanny or au pair, and the service provider.
Home management duties should be detailed and agreed to in a separate part of the enrolment agreement form to 20 Hours ECE. It is the responsibility of the service to identify what home management duties the parent and the nanny or au pair have agreed will be undertaken and when these duties will be performed. These tasks should be itemised on the enrolment form. This provides transparency and clearly differentiates the provision of 20 Hours ECE from the tasks that will be undertaken as home management.
It is the responsibility of the service to manage how 20 Hours ECE and home management duties are delivered to ensure that they are not undertaken simultaneously.
Optional charges for 'payment top-ups' for home-based educators
Optional charges cannot be requested for payment top-ups.
A payment top-up is not a service, item or activity over and above what is required by regulation for education and care.
Optional charges for qualified home-based educators
An optional charge can be requested for a qualified and certificated ECE teacher as this can be separated out and measured, is for the education and care of the child, and exceeds regulatory standards for home-based ECE.
It is reasonable for parents who choose not to pay an optional charge for a qualified and certificated educator to be offered an alternative educator. A parent cannot be penalised for choosing not to pay an optional charge.
Alternate care must be ‘like for like’ (e.g. the same days and hours). If a parent chooses not to pay the optional charge, the service cannot refuse or terminate the child’s enrolment.
Deciding if a proposed optional charge meets the criteria
The optional charge must be for a service, item or activity that is:
1. over and above the regulated standard, or
- for additional staff beyond the minimum regulated adult/child ratios
- for an item that parents may either provide for their own children or pay the ECE service or kōhanga reo to provide it.
2. for the education and care of the child.
- Does the service, item or activity directly benefit the child?
- Do the benefits directly enhance the quality of education and care?
3. able to be separated out and measured.
- Can real and actual costs can be detailed and requested?
- Is it clear how the service, item or activity is over and above regulated standard?
Education and care is defined by the components of the ECE regulations and criteria.
See the optional charges flowchart [PDF, 50 KB](external link) to find out if your proposed charges meet the criteria for optional charges.
You can ask parents for a donation to support your ECE service or kōhanga reo whether or not their children access 20 Hours ECE.
Donations are voluntary contributions and payment cannot be enforced. When requesting donations, ECE services and kōhanga reo must ensure that donations are not described as fees, or by any other term that implies they are compulsory.
When a casual or conditional child replaces an absent child who is receiving 20 Hours ECE and you continue to claim 20 Hours ECE for the absent child, you cannot charge fees for the attendance of the replacement child.
Alternatively, you could claim the ECE funding subsidy for the absent child and charge a fee for the replacement child, or claim no funding for the absent child and claim funding (ECE funding subsidy or 20 Hours ECE) for the replacement child. When you can no longer claim 20 Hours ECE for an absent child (such as when a child is absent for three or more weeks), you can charge fees to retain the child’s place.
If your ECE service wants to opt out of 20 Hours ECE, you must discuss this with parents well beforehand. Parents will need to decide if they can afford extra fees as they will no longer receive 20 Hours ECE.
To opt out of 20 Hours ECE, you stop claiming it on your RS7. If you received any advance 20 Hours ECE funding, this will be reconciled in the next funding payment.
If parents wish to withdraw their child from receiving 20 Hours ECE at your ECE service or kōhanga reo, but their child is still enrolled, make sure the Enrolment Agreement is updated so it shows the date they stopped receiving 20 Hours ECE.
This might happen if parents decide to use 20 Hours ECE at another ECE service or kōhanga reo.
- Information for parents about 20 Hours ECE (external link)is on the Parents website.
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