ECE Funding Handbook

Welcome to the Early Childhood Funding Handbook. This Funding Handbook is issued under section 548(5) of the Education and Training Act 2020(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’ for all you need to know about early childhood funding, including:

  • the Early Childhood Education (ECE) Funding Subsidy
  • 20 Hours Early Childhood Education (ECE)
  • Equity Funding
  • the Annual Top-Up for Isolated Services

Note: The information in the Funding Handbook does not apply to certificated playgroups. These services should contact their Ministry regional office for further information.

Downloading the ECE Funding Handbook

If you want a printed 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

Glossary

A Symbol Compass Books

  • 20 Hours ECE

    • 20 Hours Early Childhood Education (ECE) is a higher rate of funding for services to cover the average full cost of providing early childhood education.

      20 Hours ECE enables services to provide early childhood education to three-year-olds, four-year-olds and five-year-olds for up to a maximum of six hours per child per day and 20 hours per child per week without charging fees.

      Parents must attest on the enrolment agreement form that their child does not receive more than six hours per day and 20 hours per week of 20 Hours ECE as a total across all services the child attends.

  • 20 Hours ECE Hours

    • 20 Hours ECE Hours are the fully subsidised hours that the child receives.

      Services are eligible to claim up to six hours per child per day, to a maximum of 20 hours per child per week.

      20 Hours ECE funding is based on the child rather than the place they occupy in the service.

      20 Hours ECE hours are funded at a higher level to cover the full cost of providing ECE.

  • Absence Rules

    • Rules set by the Ministry to limit funding that may be claimed for children permanently enrolled at a service who are either continuously or frequently absent. Absence funding cannot be claimed for children who are casually or conditionally enrolled.

      The two main absence rules are:

      • the Three Week Rule For Continuous Absence and
      • the Frequent Absence Rule.
  • Advance funding

    • The proportion of a service’s actual entitlement that is paid on the basis of predicted enrolments for the forth-coming four-month period.

      The amount of advance funding paid is based on the average funded child- hours (FCHs) for the previous fourth months, the number of days the service will be operating in the forth-coming four months, and the funding rate at which each FCH will be paid.

      Seventy five per cent of this total is paid as the advance payment (or 100 per cent for kindergartens).

  • All employed

    • The term all employed, in relation to Minimum Salary Levels for Certificated Teachers, means all certificated teachers who are employed to work in the service (i.e., they are working for hire or reward under a contract of service).

      Employed certificated teachers could include:

      • permanent full or part-time teachers
      • relief teachers (i.e., short term, long term or employed by an agency), or
      • fixed-term contractors (i.e., contract of service is in place).
  • All-day service

    • A service where at least one child attends for more than four hours on any day.

  • Attest (20 hours)

    • Certify that specific information is correct by signing the attestation section of the enrolment agreement form for this purpose.

      Parents can attest as part of the enrolment form that their child does not receive more than six hours per day and 20 hours per week of 20 Hours ECE as a total across all services the child attends.

  • Audit

    • An official examination and verification of accounts and records.

      • See section: Funding claim audit; record audit in this Glossary
  • Base Funding Rates

    • The set of funding rates available to education and care services and hospital-based services that do not pay all employed certificated teachers according to the full salary scale criteria described in Section 3-B-2.

  • Calendar month

    • All the calendar days in a month, from the first day of the month to the last day e.g. 1 July to 31 July.

  • Casual enrolment

    • Enrolments for children who will not be attending a service on a regular, ongoing basis.

      A casually-enrolled child is recorded as ‘casual’ on their enrolment agreement form.

      Funding for casual children is based on attendance only.

  • Certificated teacher

    • A ‘certificated teacher’ is a holder of a current practising certificate that has been issued by the Teaching Council, or a letter from the Teaching Council advising that certification has been approved and that the practising certificate will be mailed within four to six weeks.

      A practising certificate can be marked:

      • Tiwhikete Whakaakoranga Tūturu | Full Practising Certificate (Category One)
      • Tiwhikete Whakaakoranga Pūmau | Full Practising Certificate (Category Two)
      • Tiwhikete Whakaakoranga Tōmua | Provisional Practising Certificate
      • Returning to Teaching in Aotearoa New Zealand Practising Certificate

      For more information please refer to the Teaching Council website(external link).

      Note: For ECE funding purposes, ’certificated teachers’ must have

      • A NZ ECE or primary teaching qualification and a current practising certificate, or
      • An overseas qualification assessed by NZQA as comparable to a NZ ECE or primary teaching qualification and a current practising certificate, or
      • A letter from the Teaching Council with a clear ECE or primary “endorsement” (where registration has been gained through the Council's discretionary pathway), and a current practising certificate.
  • Child-place

    • Each place for a child for which a service is licensed.

      Child-places may only be used by one child at a time, but may be used by more than one child during the course of a day. Child places are limited to the maximum number of children noted on the service’s licence.

      Funding can only be claimed to a maximum of six hours per child-place per day, up to 30 hours per child-place per week.

  • Community-based service

    • A service that is a community-based service prohibited from making financial gains that are distributed to their members including:

      • an incorporated society
      • a charitable, statutory, or community trust
      • a registered charity
      • owned by a community organisation (e.g. a city council, church, or university)
      • considered a Public Benefit Entity under XRB requirements
  • Conditional enrolment

    • Enrolments of children who are on a waiting list and that are above the service’s licensed maximum number of child-places. Conditionally enrolled children attend in the place of an absent permanently enrolled child provided the licence maximum is not exceeded at any one time.

      A conditionally enrolled child is recorded as ‘conditional’ on their enrolment agreement form.

      Use this table to find out if you can fill extra child-places with conditionally enrolled children:

      If your licence is for…You may…You must not…
      children aged two and over only fill empty places with children aged two or over. fill empty places with children aged under two.
      mixed ages fill empty under two places with children of any age. fill empty two & over places with children aged under two.
  • Coordinator

    • The person who has primary responsibility for overseeing the education and care, comfort, and health and safety of the children in a home-based service, and for providing professional leadership and support to educators within the service.

  • Discretionary hour

    • A discretionary hour is an hour that a service can claim an Other Teacher as a Certificated Teacher for the purposes of the Staff Hour Count.

      Services that must complete the Staff Hour Count may record the hours worked by relievers who are Other Teachers as Certificated Teacher Hours for the purposes of the Staff Hour Count for up to 80 hours during the funding cycle.

  • Discretionary situation

    • Either a situation in a parent/whānau-led service funded at the quality rate when a qualified reliever is not available to replace a qualified parent or whānau member who is absent or a situation in a home-based education and care service funded at the quality rate when a coordinator is not available to replace the specified coordinator of the service.

      A discretionary ‘situation’ includes any situation where coverage was not available, including lunch breaks, sessions, or full-days of operation depending on the operating structure of the service.

  • Donation

    • A donation is a voluntary payment. There is no obligation to pay and no enforcement of payment.

  • Early Childhood Staff Form

    • A form showing the actual hours worked daily by regulated (ratio) staff in an education and care service.

      The Early Childhood Staff Form is required to manage the Staff Hour Count.

      • See section: 3-B-2 Education and care services
  • EC12

    • Application for Exemption from Absence Rule for Special and/or Health Needs.

      Services seeking an exemption from the absence rules for a child with special and/or health needs must complete this form.

      An EC13 or other supporting documentation may also be required for the exemption to be approved.

  • EC13

    • Medical Certificate to support application for exemption from absence rule for Special and/or Health Needs.

      This form should be used to document the medical reasons behind an exemption from the absence rules. It must be completed by a registered medical practitioner.

  • EC20

    • Application for a Transitional Advance.

      The Transitional Advance Form (EC20) is used to calculate advance funding for services in a number of situations such as:

      • services beginning or ceasing to offer 20 Hours ECE
      • licence mergers or increases
      • significant increases in enrolments
  • Education and care services

    • A teacher-led centre-based service that is not controlled by a kindergarten association. Education and care services are required to operate with high proportions of certificated teachers.

      Individual centres can be known by many names, including creches, aoga amata and childcare centres.

  • Enrolment record

    • The formal written agreement between a parent or guardian and a service that a specific child will attend that service at specified times. An enrolment can be permanent, casual or conditional.

  • Equity Funding

    • Equity Funding is targeted funding to improve access to, and participation in quality early childhood education. Equity Funding is available to licensed, early childhood services that meet specific eligibility criteria.

      Equity funding is paid to eligible services in addition to the ECE Funding Subsidy and 20 Hours ECE.

  • Equity Index (EQI)

    • A statistical index that measures the extent to which an early childhood service draws children from low socio-economic communities. The EQI is used to determine eligibility for Equity Funding.

      The EQI is worked out on the basis of enrolled children’s addresses and information taken from the New Zealand Census 2006. The EQI for casual services is determined using the average for all other ECE services in the same area.

  • Fee

    • A fee is a payment that is required as a condition of enrolment and can be enforced.

      Enforcement is when a service withholds or withdraws enrolment, or withholds or withdraws parts of their service (for example children not permitted to take part in certain activities), or makes debt recovery.

  • Funding rates

    • The dollar amount of funding that a service is paid for each funded child hour (FCH).

  • Funded Child Hour (FCH)

    • An occupied child-place that is funded for one hour.

      Services may be funded the ECE Funding Subsidy (Under 2 and 2 and Over) for up to six FCHs per child-place per day, to a maximum of 30 FCHs per child-place per week.

      Services may be funded 20 Hours ECE (20 Hours ECE Hours and Plus 10 ECE Hours) for up to six FCHs per child per day, to a maximum of 30 FCHs per child per week.

  • Funding Rate Table

    • A table provided by the Ministry which shows the funding rates for all early childhood services.

      A copy of the Funding Rate Table can be found in Appendix 1 and will be updated each time there is a change to the rates.

  • General purpose financial statements

    • The style of financial statements that must be completed by community- based services. They should include statements of:

      • accounting policies
      • financial performance (profit and loss account) that includes specific reference to the funding received from the Ministry of Education
      • financial position (i.e. a balance sheet)
      • movements of equity
      • notes about equity funding and how this has been spent (when applicable).
  • Home-based ECE services

    • Early childhood education services where early childhood education is provided for up to four children in an educator’s home, the child’s own home or a home nominated by the child’s parent.

      Home-based services are supervised by coordinators who are certificated teachers.

      Homes are grouped together in a service, the person or organization that operates the group of homes is the service provider.

  • Isolation Index

    • A statistical index that rates a service’s relative isolation according to its distance in kilometres from services of three different population sizes.

  • Kindergarten

    • A teacher-led centre-based service controlled by a kindergarten association.

  • Kindergarten Association

    • A service provider that controls one or more kindergartens formerly recognised under the Kindergarten Regulations 1959, or that has formed from a free kindergarten association or associations that controlled kindergartens recognised under these Regulations. 

  • Licence

    • A document issued by the Ministry of Education detailing the hours during which an early childhood education service may operate, and the maximum number of child-places the service may fill.

      It is illegal to operate any premises as an early childhood education service without a licence.

  • Mixed Provision Service

    • An early childhood education service that offers a mixture of both teacher-led and parent-led education and care sessions.

  • Notional roll

    • Funding on the basis of average actual attendance over a specified period.

      Some services may be funded on notional rolls in recognition of the special function they serve in a community e.g. women’s refuge centres.

  • Optional charge

    • A request for a payment that parents may choose whether or not to make. There must be no penalty for parents who choose not to make the payment. Once an agreement to pay has been reached then services may enforce payment.

      Optional charges must apply for a specific purpose, which could be one-off or ongoing.

  • Other Teacher

    • A teacher at a teacher-led centre-based service who does not hold a practising certificate issued by the Teaching Council of Aotearoa, New Zealand (Teaching Council) or does not hold a Teaching Council-approved ECE qualification or New Zealand qualified primary teacher qualification.

  • Parent/ whānau-led services

    • A category of early childhood services that:

      • requires of parent and/or whānau involvement in providing education and care for children
      • does not have to meet the teacher certification criteria
      • includes licensed playcentres and licensed kōhanga reo
      • excludes teacher-led services.
  • Parity Funding Rate

    • A higher set of funding rates available to education and care services and hospital-based services who pay all employed certificated teachers according to the full salary scale described section 3-B-2.

  • Permanent enrolment

    • Enrolments that are:

      • within the service’s licensed maximum number of child places; and
      • where the child is entitled to attend for the enrolled hours on a regular, ongoing basis.

      The attendance of a permanently enrolled child does not depend on the absence of any other enrolled child.

  • Playcentres

    • Early childhood education services that belong to an association affiliated with the New Zealand Playcentre Federation Inc.

      A primary characteristic of playcentres is that families manage and implement the education programme.

  • Plus 10 ECE Hours

    • Plus 10 ECE hours are the ECE Funding Subsidy funded hours available per child once that child has used all of their 20 Hours ECE hours.

      They are the difference between 30 hours of funding less the 20 Hours ECE Hours, and can be claimed up to six hours per day per child.

  • Practising certificate

    • A certificate issued by the Teaching Council of Aotearoa, New Zealand. Holders of a current practising certificate (full, provisional or subject to confirmation) are legally able to teach in New Zealand.

  • Private service

    • A service that is not community-based. It may be owned by a private company, publicly listed company, private trust, partnership, or an individual.

      Private services are able to make financial gains and distribute these to their members.

  • Registered teacher

    • A holder of a Teaching Council approved teaching qualification who has been registered by the Teaching Council. Note: A teacher must hold a current practising certificate to be able to teach.

      A certificated teacher must hold an early childhood education teaching or New Zealand qualified primary teacher qualification.

  • Salary Scale

    • The Salary Scale defines the minimum salary levels for a certificated teacher employed at an education and care service or hospital-based service.

      Full Salary Scale – defines the salary steps required to be attested to in order for a service to receive parity funding rates.

  • Sessional service

    • A service where no child attends for more than four hours in total on any one day.

  • Tagged funding

    • Funding that must be used to cover particular expenses or to meet particular objectives e.g. Equity Funding.

  • Targeted Funding for Disadvantage

    • Targeted Funding for Disadvantage (Targeted Funding) is a specific funding mechanism for ECE services and ngā kōhanga reo to assist children considered to be from disadvantaged backgrounds. Targeted Funding is available to licensed, early learning services that meet specific eligibility criteria.

      Targeted Funding is paid to eligible early learning services in addition to the ECE Funding subsidy, 20 Hours ECE and Equity Funding.

  • Targeted Hours

    • Targeted Hours are the estimated number of Funded Child Hours attended by children considered to be from disadvantaged backgrounds.

      Targeted Hours are used to calculate services’ funding entitlement for Targeted Funding for Disadvantage.

  • Teacher-led services

    • A category of early childhood education services where one or more qualified teachers are responsible for the overall programme in the service. They are required to have a person responsible (or home-based care coordinator) who is a qualified, certificated, teacher.

      In teacher-led education and care centres and kindergartens, the person responsible may be primary or ECE qualified. In hospital-based and home-based services, only ECE qualified teachers can be a person responsible.

      For funding purposes, teacher-led services include:

      • education and care services
      • kindergartens
      • hospital-based services
      • home-based care services
      • services that are recognised by the Ministry as meeting the requirements for teacher-led funding rates.
  • Teaching Council of Aotearoa, New Zealand

    • A crown entity established under the Education Act (1989) and is continued under the Education and Training Act 2020; it’s functions include:

      • determining standards for teacher registration and the issuing of practising certificates
      • establishing and maintaining the qualifications that lead to teacher registration.
  • TeachNZ

    • A unit of the Ministry of Education. One of the functions of TeachNZ is to assist with inquiries from members of the public who are interested in gaining teaching qualifications.

      You can contact TeachNZ on 0800 832 246 or visit their website(external link).

  • Wash-up funding

    • The proportion of a service’s actual entitlement that is paid on the basis of actual funded child hours for the previous four-month period.

      Wash-up funding is funding that makes up the difference between the advance payment made in the previous funding payment and a service’s actual funding entitlement for the previous four-month period.

      Wash-up funding may be a positive (e.g. $2000.00) or negative (e.g. -$2000.00) amount. If it is negative, the Ministry deducts the amount from future payments.