ECE Funding Handbook

This section explains:

• how the ECE Funding Subsidy for education and care services is calculated
• the minimum salary scale for certificated teachers employed in education and care services
• the minimum salary scale for certificated teachers employed in a management position in education and care services
• funding conditions related to the attestation of certificated teacher salaries for education and care services
• the definitions of Certificated Teacher Hours and regulated (ratio) staff
• how to keep track of Certificated Teacher Hours
• how the proportion of Certificated Teacher Hours is turned into a funding rate
• record keeping requirements for teacher-led education and care services.

Education and care services are centre-based, and are often referred to by a range of other descriptions, including crèches, aoga, and childcare centres.

Kindergartens, which are teacher-led centre-based services controlled by a kindergarten association [see Glossary], are treated differently for funding purposes.

Kindergarten funding is calculated using the same variables as education and care services, with the exception of the Attestation of Certificated Teachers' Salaries. Kindergartens must keep the same records as education and care services. There is a separate funding rate for kindergartens [See Appendix 1].

See Section 3-B-2a for funding conditions related to kindergartens.

All-day and sessional education and care services each have three sets of funding rates.

• Base Funding Rates – the set of funding rates available to education and care and hospital-based services who pay all employed certificated teachers at least Step 1 of the salary scale described in this section.
• Parity Funding Rates – a higher set of funding rates available to education and care and hospital-based services who pay all employed certificated teachers according to Steps 1 to 6 of the salary scale described in this section.

• Extended Parity Funding Rates – a higher set of funding rates available to education and care and hospital-based services who pay all employed certificated teachers according to Steps 1 to 11 and the management step of the salary scale described in this section.

Note: Funding conditions related to Steps 6 – 11 of the minimum salary scale for certificated teachers and the minimum salary scale for management positions are effective from 1 January 2023.

See Section 2-6 for information on funding rates.

Higher funding rates are available to education and care and hospital-based services who attest to paying all employed certificated teachers at least the amounts described in the salary scale in the next sub section.

• Base Funding Rates are available to services who pay at least Step 1
• Parity Funding Rates are available to services who pay at least Steps 1 to 6
• Extended Parity Funding Rates are available to services who pay at least Steps 1 – 11 and the management salary step

Education and care or hospital-based services who attest to paying all employed certificated teachers at or above Step 1 of the salary scale described in this section will have their funding band determined by the number of ‘Certificated Teacher Hours’ a service has as a proportion of the total number of regulated (ratio) staff hours.

An education and care service or hospital-based service who does not attest to paying all employed certificated teachers at least the amount specified at Step 1 of the salary scale described in this section will be funded at the 0 – 24% base funding rate.

Note: Funding conditions related to Steps 6 – 11 of the minimum salary scale for certificated teachers and the minimum salary scale for management positions are effective from 1 January 2023.

Higher funding rates are available to education and care services who pay all employed certificated teachers service at or above certain minimum salary steps.

Minimum Salary Scale for Certificated Teachers

(E) denotes the salary step entry point for each qualification group

(M) denotes the maximum point on the salary scale for each qualification group

These yearly salaries are calculated on the basis of a 40-hour employed week. Where a teacher generally works more or less than 40 hours per week, the salary should be calculated to ensure the required hourly rate is maintained. An indicative hourly rate can be found by dividing the minimum salary level by 2080 (40 hours x 52 weeks), rounding is to be applied to at least two decimal places.

Steps 1 – 6 of the salary scale above reflect the first six steps of the Kindergarten Teachers, Head Teachers and Senior Teachers' Collective Agreement 2019 – 2022 (KTCA). Steps 7 – 11 only reflect a partial salary amount in relation to the KTCA.

Higher funding rates are available to education and care services, who pay all certificated teachers employed in a Management Position at or above the management salary step.

Minimum Salary Scale for Management Positions

Certificated teachers who are appointed to a Management Position will enter the salary scale on the management salary step.

This yearly salary is calculated on the basis of a 40-hour employed week. Where a teacher generally works more or less than 40 hours per week, the salary should be calculated to ensure the required hourly rate is maintained.  An indicative hourly rate can be found by dividing the minimum salary level by 2080 (40 hours x 52 weeks), rounding is to be applied to at least two decimal places.

Note: Funding conditions related to Steps 6 – 11 of the minimum salary scale for certificated teachers and the minimum salary scale for management positions are effective from 1 January 2023.

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

Employed certificated teachers could be:

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

A “management position”, in relation to Minimum Salary Scale for Management Positions, means all certificated teachers who are employed to work in one of the three following positions in an education and care service:

• K2 - employed to be in charge of a service, and who is not a K3 or K4 employee
• K3 - employed to carry out professional support, guidance, and administrative roles, and responsible for the management of K2 employees, under delegation from their employer
• K4 - employed to be responsible for the management of K3 employees

An example of an education and care role that typically may be considered a K2 position is a ‘centre manager’. Employees who are employed with some leadership or management responsibilities but are not employed in any of the three above management positions, are not considered to hold a management position. Examples of education and care roles that typically may not be a management position include: assistant manager, second-in-charge, and other teachers with leadership responsibilities but are not in charge of the service. These employees excluded from K2, K3, and K4 must still be paid at least base teacher salaries according to the certificated teachers’ minimum salary scale.

Management positions may be held by:

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

The salary scales shown reflect the base salary for an employed certificated teacher. Bonuses, non-cash, or in-kind benefits cannot be counted towards the minimum salary requirements.

Matters regarding remuneration over and above base salary are to be discussed between the teacher and their employer.

For salary purposes, New Zealand qualifications that are registered on the New Zealand Qualifications Framework (NZQF) must be recognised.

Overseas qualifications must be assessed by the New Zealand Qualifications Authority (NZQA) as comparable to the nearest New Zealand equivalent qualifications.

Teachers are to be assessed on the highest qualification held.

P1, P2 and P3 for teachers who hold a current practising certificate issued by the Teaching Council of Aotearoa New Zealand but no subject or specialist qualification at level 7 or above on the NZQF, or equivalent overseas teaching qualifications recognised by the NZQA.

This group includes teachers who have obtained their practising certificate via the Teaching Council’s discretionary pathway process, provided they have received an ECE or Primary endorsement from the Council.

P3+ for teachers who hold a current practising certificate issued by the Teaching Council of Aotearoa New Zealand and:

• a subject or specialist level 7 qualification on the NZQF (i.e. not an initial teacher education qualification) which can be a Diploma (excluding a National Diploma), Graduate Diploma or Degree; or
• an honours degree of teaching; or
• equivalent overseas qualifications assessed by the NZQA or an overseas qualification where NZQA has assessed that the qualification has level 7 (graduate) study in a subject or specialist area(s) i.e. any area of study that is not initial teacher education.

P4 for teachers who hold a current practising certificate issued by the Teaching Council of Aotearoa New Zealand and:

• a subject or specialist level 8 qualification on the NZQF which can be an honours degree or a Post Graduate Diploma; or
• two subject or specialist level 7 qualifications on the NZQF (as listed above); or
• a masters degree of teaching; or
• equivalent overseas qualifications assessed by the NZQA.

P5 for teachers who hold a current practising certificate issued by the Teaching Council of Aotearoa New Zealand and:

• a subject or specialist level 9 qualification on the NZQF - masters or doctorate; or
• equivalent overseas qualifications assessed by the NZQA.

A service cannot count employer KiwiSaver contributions towards the minimum salary requirement if the service attests to paying all employed certificated teachers according to Step 1 to 6 or Step 1 to 11 + Management of the salary scale.

If only attesting to paying all employed certificated teachers at least the amount described at Step 1 of the salary scale, a service may count employer KiwiSaver contributions towards the minimum salary requirement, provided it has been agreed to by the teacher and their employer.

Note: Funding conditions related to Steps 6 – 11 of the minimum salary scale for certificated teachers and the minimum salary scale for management positions are effective from 1 January 2023.

When determining a teacher’s initial salary step recognised service means service within New Zealand as a:

• a trained early childhood teacher in a teaching capacity in a licensed early childhood centre or the Early Childhood Service of Te Aho o Te Kura Pounamu (The Correspondence School)
• a Head or Senior Teacher in a kindergarten
• a qualified certificated teacher employed in a teaching position within a New Zealand state or state integrated school (including Kaupapa Māori education)
• qualified certificated relieving teachers employed continuously for six weeks or more in a New Zealand licensed early childhood centre or a state or state integrated school (including Kaupapa Māori).

Any service should be recognised in full when determining a teacher’s initial salary step.

A teacher’s initial salary step should be determined by:

• their applicable qualification group, and
• any service recognised for salary purposes, and
• any previous relevant work experience

It is up to a teacher to provide evidence, to the satisfaction of their employer, of any factors used to determine their initial salary step.

The initial salary step for a certificated teacher appointed to a Management Position will be the step on the Minimum Salary Scale for Management Positions.

Any dispute regarding the recognition of a teacher’s qualification group, recognised service or previous relevant work experience is an employment relation matter. Such matters are to be resolved by the teacher and their employer. The Ministry will not intervene in employment matters.

Note: Funding conditions related to Steps 6 – 11 of the minimum salary scale for certificated teachers and the minimum salary scale for management positions are effective from 1 January 2023.

When determining a teacher’s initial salary step previous relevant paid work experience means professional employment using knowledge of the education service, and/or teaching skills including:

• Voluntary Service Abroad - providing service was in a teaching position while the teacher held a teaching certificate;
• Teacher education lecturers and community education tutors - providing service in a teaching position while the teacher held a teaching certificate;
• Kaiarahi i te Reo;
• Teacher Aides / Kaiawhina;
• Public sector employment with education focus, e.g., Ministry of Education, Early Childhood Development or other Crown Education Agencies;
• Education officer in Government and non-Government organisations;
• Special Education;
• Social worker employed by DSW or Board of Trustees;
• Professional officer of NZEI Te Riu Roa/PPTA/TTANZ;
• Librarian;
• Museum, Art Gallery, Zoo education officers;
• Untrained employees in teaching positions in licensed early childhood education centres including kindergartens and nga kōhanga reo; and
• Family day care co-ordinators in licensed home based early childhood education services.

Any previous relevant work experience that has occurred within the past 10 years should be credited as half-service up to a maximum of two steps.

Any previous relevant work experience that has occurred more than 10 years ago should not be credited towards a teacher’s initial salary step.

Half-credit means that each hour worked in the relevant role should be counted as half an hour of work for salary purposes.

An employed certificated teacher should progress one salary step:

• following the completion of 2080 hours of work, and
• the teacher is assessed as meeting the applicable Teaching Council of Aotearoa New Zealand’s Standards | Ngā Paerawa for the purposes of certification.

Where a teacher has been assessed as not meeting the appropriate Standards for their category of practising certificate, salary progression may be deferred. For each teacher to progress to their next step they will need to demonstrate that they meet the appropriate professional Standards.

Progression of certificated staff through the salary steps described in this section is only a required funding condition while a service attests to meeting the requirements of the full salary scale. If a service chooses not to attest, at any point, the condition does not apply. However, legal agreements that specify salary progression may still apply (e.g. employment contracts).

Teachers who improve their relevant qualification(s), where their current salary rate is lower than the entry step for the new (improved) relevant qualification group, should be placed on the higher applicable entry step from the effective date of improving their relevant qualification(s).

The effective date of a movement to a higher group following an improvement of qualification(s) is:

• the commencing date of the first term of the following year – when qualifications are improved at the end of the academic year; or
• the date of official results – where qualifications are improved during an academic year

Hours of work relates to the total hours required for a teacher to properly fulfil the duties and responsibilities connected with their employment. This includes, rostered hours, non-contact hours and any paid leave, excluding parental provisions.

The Funding Rate Table shows the funding rates for each type of service. A copy of the table is included with this Handbook (Appendix 1).

The Funding Rate Table will be updated with any change in funding rates.

When completing the Attestation of Certificated Teachers’ Salaries section of the RS7 return, a service is confirming what funding conditions they have met for the RS7 return period.

A service’s funding rate will be adjusted if they are found to have not met the necessary funding conditions for the entire funding period. Any funding recoveries resulting from this change in funding rates will be made during the next funding payment.

For information on how to complete the Attestation of Certificated Teachers’ Salaries for the RS7 return see Section 9-6.

Note: For the March 2023 funding round the attestation period for funding conditions related to salary steps 6-11 start from 1 January 2023.

Regulated (ratio) staff are staff required to meet the minimum regulatory requirements for staff:child ratios.

To find out the regulated (ratio) staff requirements for your service, please refer to the Education (Early Childhood Services) Regulations 2008(external link).

For more information on the Regulations see: www.legislation.govt.nz(external link)

Regulated (ratio) staff hours are the total number of hours worked by all regulated (ratio) staff in a service each day.

Hine and Jocelyn work at Rimu Rd Crèche from 7am to 3pm every day.

From 7am-8:30am, there are usually only a few children present. This means only one person is required to meet the regulated (ratio) staff requirements.

The regulated (ratio) staff hours from 7am-8:30am = 1.5 hours. Only include those staff who are required to be present to meet regulated ratio requirements during that time period. For this example only include either Hine’s or Jocelyn’s hours.

Certificated Teacher Hours are the total number of hours worked by all certificated teachers in a service at times when they were counted towards regulated (ratio) staff.

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.

This includes teachers whose practising certificates are marked 'full', 'provisional' or ‘subject to confirmation’. For more information please refer to the Teaching Council's website.(external link)

Note: For ECE funding purposes, ’certificated teachers’ must be ECE qualified teachers, or New Zealand qualified primary teachers or have comparable overseas primary teacher’s qualifications supported by an assessment from NZQA.

For funding purposes, ‘Other Teachers’ are defined as any regulated (ratio) staff members who do not meet the above definition of a certificated teacher.

‘Other Teacher Hours’ are regulated (ratio) staff hours worked by ‘Other Teachers’ as defined above.

Hine, Jocelyn, and Alex work at Rimu Road Crèche from 7am to 3pm each day. Hine is a certificated teacher. Jocelyn and Alex are not certificated teachers.

From 9am - 11am there are 12 children present. Two people are required to meet the regulated (ratio) staff requirements. From 9am-11am Hine’s hours are counted as Certificated Teacher Hours. Jocelyn’s hours are counted as Other Teacher Hours.

Alex’s hours are not counted because only two people are required to meet the regulated (ratio) staff requirements.

Education and care services are required to keep a Staff Hour Count that will keep track of the number of Certificated Teacher Hours and Other Teacher Hours that make up the regulated (ratio) staff hours for their service.

Services must use the Staff Record to manage the Staff Hour Count.

Education and care services must keep a Staff Record to manage their Staff Hour Count. The Staff Record shows the actual hours worked by regulated (ratio) staff on a daily basis.

For the purposes of the Staff Hour Count the Staff Record must contain all of the following:

• the names of staff used for regulated (ratio) staff requirements at any time during the day
• a note against each staff member’s name that identifies whether or not the person is a certificated teacher
• the actual number of regulated (ratio) staff that were required during each hour of the day to meet regulated (ratio) staff requirements
• the actual hours worked each day by each regulated (ratio) staff member
• the total actual hours worked each day by certificated teachers who were counted towards regulated (ratio) staff requirements (including hours worked by Other Teachers acting as relievers for up to 80 discretionary hours) for education and care and hospital-based services, and kindergartens).
• the total actual hours worked each day by Other Teachers who were counted towards regulated (ratio) staff requirements.

You can complete your Staff Record either:

• at the end of the day, recording actual hours worked by regulated (ratio) staff (make sure you keep a copy of the roster or schedule to support this) or
• planning your roster or schedule before the start of the week, and making changes each day only if there was a change to the regulated (ratio) staff requirements for any of the hours in that day. By the end of the week, the planned staff record will have become a record of actual hours worked.

The table below shows one way you could complete your Staff Record and Staff Hour Count.

Breaks/absences of 15 minutes or more must be recorded on the Staff Record to maintain transparency, and may be counted as one discretionary hour.

Breaks/absences under 15 minutes do not need to be recorded on the Staff Record.

Services must record the hours covered by Other Teachers as Other Teacher Hours on the Staff Record and Staff Hour Count for breaks/absences over 15 minutes.

Refer to the Glossary in this Handbook for definition of discretionary hours.

• List the number of discretionary hours (or parts thereof) that have been used to cover the absence of each certificated teacher for the day.
• Add together the allowable discretionary hours that have been used to cover the absences of all certificated teachers for the day.
• Round the total to the nearest whole number. Numbers ending in 0.5 or above should be rounded up to the next whole number. Numbers ending in 0.4 or below should be rounded down to the previous whole number.

Service providers must keep evidence of attempts to contact a certificated teacher to cover the absence.

These records should be kept at the service for examination by the Ministry’s Resourcing Auditors during an audit. They do not need to be sent to the Ministry each funding period.

Services should maintain a list of certificated relievers who are available when certificated teachers are absent.

The Ministry will accept up to 80 discretionary hours per funding period (to maintain current rates of funding) when certificated relievers are not available, provided that the record keeping requirements described in this section are met.

Education and Care services may record the hours worked by relievers who are Other Teachers as Certificated Teacher Hours for the purposes of the Staff Hour Count for 80 hours during the funding period.

Centres may choose which hours these apply to – they do not have to apply to these 80 hours.

Services are required to submit a record of the number of discretionary hours they have used in a funding period to the Ministry

If no discretionary hours have been used, then no submission is required.

Discretionary Hours Reporting

Every service that uses discretionary hours during the current funding period, must submit a record of the total number of discretionary hours used.

Services that use an approved student management system (SMS) please contact your SMS provider if you require assistance in providing this information.

Services that submit paper-based RS7 or use ELI Web and have used discretionary hours during a funding period, must submit the report found at the following link along with their RS7.

Discretionary Hours report [PDF, 275 KB]

Refer to the Glossary in this Handbook for definition of discretionary hours.

The Staff Record must be signed (in full) at the end of each week by each regulated (ratio) staff member as a true and correct record of their actual hours worked for that week.

A sample Staff Record is provided in Appendix 2.

You may use this as a template for your service’s Staff Record or design your own provided the information required in the Staff Record (see section above) is included.

Follow the diagram below to see an example of how a service’s Staff Hour Count is used to determine their funding rate.

Services do not need to apply for a change of funding rate. This will be automatically calculated by the Ministry when they submit their RS7 return each funding round.

1. Kowhai Street Childcare Centre completes their November RS7 Return with their Certificated Teacher Hours and regulated (ratio) staff hours for June, July, August and September.
2. Kowhai Street attests that all of their employed certificated teachers are being paid at least the amount specified at Step 1.
3. The Ministry calculates that the percentage of Certificated Teacher Hours for June - September for Kowhai Street Childcare Centre was 67%.
4. Kowhai Street is placed on the 50-79% base funding rate.
5. Kowhai Street’s wash-up funding for June, July, August and September is paid at the 50-79% base funding rate.
6. Kowhai Street’s advance funding for November, December, January and February is paid at the 50-79% base funding rate.

1. Kowhai Street Childcare Centre completes their March RS7 Return with their Certificated Teacher Hours and regulated (ratio) staff hours for October, November, December and January.
2. Kowhai Street attests that all of their employed certificated teachers are being paid at least the amount specified at Step 1 to 6.
3. The Ministry calculates that the proportion of Certificated Teacher Hours for October – January was 82%.
4. Kowhai Street’s wash-up funding for October, November, December and January is paid at the 80-99% parity funding rate.
5. Kowhai Street’s advance funding for March, April, May and June is paid at the 80%-99% parity funding rate.

1. Kowhai Street Childcare Centre completes their July RS7 Return with their Certificated Teacher Hours and regulated (ratio) staff hours for February, March, April, and May.
2. Kowhai Street attests that all of their employed certificated teachers are being paid at least the amount specified at Step 1 to 11 + Management
3. The Ministry calculates that the proportion of Certificated Teacher Hours for February – May was 92%.
4. Kowhai Street’s wash-up funding for February, March, April, and May is paid at the 80-99% extended parity funding rate.
5. Kowhai Street’s advance funding for July, August, September, October is paid at the 80%-99% extended parity funding rate.

A sample Staff Record is provided in Appendix 2.

You may use this as a template for your Early Childhood Staff Record, or design your own (as long as the information above is included).

Use the following table to find further information about record keeping and financial reporting requirements:

Services must keep the following documentation:

• a copy of the current practising certificate of each certificated teacher
• copies of ECE, Primary or overseas qualifications along with NZQA assessments of the overseas qualification for all certificated teachers
• copies of the letter of registration with an ECE or primary endorsement from the New Zealand Teaching Council
• a Staff Record (that has recorded the actual hours worked by all regulated (ratio) staff) for every day the service is operating
• signature sheets where regulated (ratio) staff have signed (in full) at the end of each week that the Staff Record is a true and correct record of their actual hours worked for that week
• records that verify that each certificated teacher counted towards Certificated Teacher Hours was employed by the service at that time
• records that verify the pay rate at which each certificated teacher is paid. This must include copies of signed employment contracts, letter of appointment and letter(s) confirming changes in salaries paid to certificated teachers, including certificated relievers.
• records that verify how a certificated teacher’s initial and current salary was determined. This must include evidence of service recognition, previous relevant work experience, salary progression and other evidence used to determine a teacher’s salary step.
• records that verify how the initial and current salary of a certificated teacher employed in a Management Position was determined.

Documentation (including copies of practising certificates) must be kept for seven years.