ECE Funding Handbook

Welcome to the ECE Funding Handbook. This handbook is issued under section 548(5) of the Education and Training Act 2020.

Funding of certain services and certified playgroups – New Zealand Legislation(external link)

The funding paid to licensed services is paid subject to the terms and conditions set out under this handbook and must be complied with. The terms used in this handbook are based in the Education (Early Childhood Services) Regulations 2008.

This handbook is designed to be a 'one-stop-shop' of everything you need to know about early childhood funding, including:

  • the ECE Funding Subsidy
  • 20 Hours ECE funding
  • equity funding
  • the annual top-up for isolated services.

This information does not apply to certificated playgroups

The information in the Funding Handbook does not apply to certificated playgroups.

These services should contact their Ministry regional office for more information.

Local Ministry offices

Download the ECE Funding Handbook

If you would like to print a copy of this handbook, refer to the list of downloads in the contents section where you will find downloadable PDF versions of each chapter.

ECE Funding Handbook downloads

10-5 Component D: Isolation

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  • Description
    • Component D: Isolation recognises that isolated services will face higher costs when accessing goods and services.

  • The Isolation Index
    • Eligibility for Component D is based on the Isolation Index. This index rates a service’s ‘relative isolation’.

      A service’s Isolation Index is worked out by measuring the service’s distance from towns/cities of three different population sizes (5,000, 20,000, and 100,000).

  • How is funding calculated?
    • Funding is a fixed monthly grant. There are currently three payment bands, which reflect different levels of isolation. This means that more isolated services receive a higher rate of funding.

      Funding is not based on the size of a service nor the number of funded child hours claimed.

  • Applications
    • Applications for Component D are not necessary. The Ministry of Education calculates the Isolation Index for each new service, using census information and the physical location of the service.

      Services do not need to provide additional information.

  • Isolation Index Review
    • In general, a service’s Isolation Index can only be changed when new data from the census has been obtained.

      This is because the Index is based on a service’s distance from population centres of different sizes. The Ministry requires population data from the census to determine the population sizes.

      If you believe there has been a significant error in the value of your service’s Isolation Index, please contact the Ministry’s Data Management Unit, National Office on 04 463 8000.

  • Is this different to the ATIS?
    • Yes. The ATIS is available to licensed ECE services, with an Isolation Index of 1.65 or greater, which also meet certain income requirements.

      It is possible for services to receive both Component D equity funding and the ATIS.

      Further details on the ATIS are available in Section 5-1.

  • Expenditure
    • All Equity Funding is ‘tagged’ and must be spent with the equity objectives for participation and quality in mind.

      Below are some suggestions for uses of Component D funding:

      • provide assistance to attend the service (for example, transport assistance)
      • provide more professional development opportunities for staff
      • upgrade resources
      • introduce staff recruitment and retention initiatives
      • assist in meeting the additional costs of service delivery.

      These are just some of the ways Component D Equity Funding can be used.