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 – NZ 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 further 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

13-3 How to use Targeted Funding

Targeted Funding

Targeted Funding must be used to improve the early learning experiences of children/tamariki early learning services consider to be from disadvantaged backgrounds.  

Guidelines for Targeted Funding

Services must use Targeted Funding in line with the requirements specified in the Targeted Funding Guidelines [PDF, 681 KB].

The Ministry has identified four areas for spending:

  • Working with families/whānau - To extend relationships with families and whānau to support learning and development in the home
  • Removing barriers to learning - To remove barriers to participation in early learning and meet the basic needs of children/tamariki so they are well positioned to develop and learn
  • Enriching learning environments - To provide rich learning opportunities that support the development of children/tamariki, specifically their oral language and literacy development
  • Tailored teaching approaches - To support teachers, kaiako and parents to understand and respond to the learning and development needs of children/tamariki


The Targeted Funding Guidelines provide exemplars for how early learning services can use Targeted Funding.

They also provide a quality improvement cycle, self-review template and planning questions. These are intended to help early learning services plan for and review their use of Targeted Funding.

Services must spend Targeted Funding in the funding period it was allocated.

Restrictions on spending Targeted Funding

Targeted Funding cannot be used for general operating expenses or profit.

This includes:

  • General property maintenance (for example: painting, heating systems, roofing and gardening)
  • Rental costs
  • Paying off debt
  • General education resources (for example: playground equipment and furniture)
  • Investment in a separate account or entity and to accumulate interest or generate profit
  • General operating costs (for example: police vetting, teacher certification costs and electricity or water bills)
  • Professional development for courses/seminars that are not aimed at improving the outcomes for priority learners
  • Marketing and promotional activities/resources.

Pooling of Targeted Funding

Early learning services can combine their Targeted Funding with other services receiving Targeted Funding.

Service providers, umbrella organisations and Kāhui Ako can only pool Targeted Funding if each individual service agrees and provides written consent that details how much of their Targeted Funding entitlement they wish to pool.

Targeted Funding must be spent on those early learning services that generated the Targeted Funding entitlement.