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

3-B-2 Teacher-led education and care services

E symbol.  K symbol.  Books

  • Introduction
    • This section explains:

      • how the ECE Funding Subsidy for education and care services is calculated
      • the minimum salary levels for certificated teachers employed 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
    • 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
    • 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.

  • Funding rates
    • All-day and sessional education and care services each have two sets of funding rates.

      • Base Funding Rates – the set of funding rates available to education and care and hospital-based services that do not pay all employed certificated teachers according to the full salary scale criteria 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 the full salary scale described in this section.

      Education and care or hospital-based services who pay all employed certificated teachers at least the amount specified at 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 or hospital-based service who does not pay 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.

      See Section 2-6 for information on funding rates.

  • Attestation of certificated teachers’ salaries
    • By attesting that all employed certificated teachers are being paid at least the amount specified at Step 1, of the salary scale described in the next sub-section, education and care services will be eligible to receive base funding rates which reflect the proportion of certificated teacher hours used during the funding period.

      Education and care services who attest to paying all employed certificated teachers according to the criteria for the full salary scale described in the next sub-section will be eligible to receive higher parity funding rates which reflect the proportion of certificated teacher hours used during the funding period.

  • Minimum Salary Levels for Certificated Teachers
    • Higher funding rates are available to education and care services who pay all employed certificated teachers service at or above certain minimum salary levels.

      The minimum salary levels are:

      Salary from 1 July 2020 Salary from 1 July 2021
      $49,862 $51,358

      Full salary scale:

      Step Qualification Group Notations SALARY FROM 1 January 2022
      1 P1E, P2E, P3E $51,358
      2   $53,544
      3 P3+E $55,948
      4 P4E $58,133
      5 P5E $61,794

      (E) denotes the salary step entry point 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.

  • 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 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).
  • Salaries Reflect Base Pay
    • The salary levels 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.

  • Minimum Salary Levels and Employer KiwiSaver Contributions
    • A service cannot count employer KiwiSaver contributions towards the minimum salary requirement if the service attests to paying all employed certificated teachers according to the full 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.

  • 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.

      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.

  • Qualification Groups
    • 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.
  • Recognised Service
    • 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.

  • Previous Relevant Work Experience
    • 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.

  • Salary Progression
    • 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).

  • Salary Progression: Improved Qualifications
    • 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
    • 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.

  • Attestation Period
    • 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.

      Funding Period Attestation Period
      March October – January
      July February – May
      November June – September

      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 2022 funding round the attestation period for the full salary scale only relate to funding conditions met from 1 January 2022.

  • Funding Rate Table
    • 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.

  • Example: regulated (ratio) staff
    • 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
    • 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.

  • ‘Other Teachers’ and Other Teacher Hours
    • 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.

  • Example: Certificated and Other Teacher Hours
    • 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.

  • Keeping track of teacher hours
    • 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.

  • Staff Record requirements
    • 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 40 discretionary hours for kindergartens).
      • the total actual hours worked each day by Other Teachers who were counted towards regulated (ratio) staff requirements.
  • How to complete the Staff Record
    • 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.

      StepAction
      1 Choose a ‘block of time’ that you will use on your Staff Record. This could be either a half or whole hour block.
      2 Work out your regulated (ratio) staff requirement for each block of time. This should be based on the maximum number of children who attended during each block of time.
      3 Write down your regulated (ratio) staff requirement for each block of time.
      4 Write down the actual blocks of time worked by each regulated (ratio) staff member. Make sure you write down the staff member’s name and indicate whether they are a certificated teacher.
      5 If you have used half hour blocks, convert these blocks into whole hours.
      6 Add up the total actual hours worked each day by certificated teachers who were counted towards regulated (ratio) staff requirements. Write this number down. 
      7 Add up the total hours worked each day by Other Teachers who were counted towards regulated (ratio) staff requirements. Write this number down. 
      8 These totals are your Staff Hour Count. 
  • Recording breaks/ absences
    • 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.

  • Certificated teacher absences and discretionary hours
    • Services should maintain a list of certificated relievers who are available when certificated teachers are absent.

      An increase to discretionary hours will apply to education and care services from 1 June 2021 until 31 January 2022. During this time the Ministry will accept up to 80 discretionary hours per funding period when certificated relievers are not available, provided that the record keeping requirements described in this section are met.

      Between 1 June 2021 until 31 January 2022, 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 up to a maximum of 80 hours during a funding period.

      Centres may choose which hours these apply to – they do not have to apply to the first 80 discretionary 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, 129 KB]

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

  • How to use 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.
  • Discretionary hours: record keeping
    • 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.

  • Signing the Staff Record
    • 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.

  • Staff Record Template
    • 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.

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

  • Example: November funding period
      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, but not according to the full salary scale criteria.
      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.
  • Example: March funding period
      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 and according to the full salary scale criteria.
      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.
  • Process for change of 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.

  • Record keeping
    • 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.

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

  • Staff record template
    • 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).

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

      If you are looking for...See Section
      Record keeping requirements for 20 Hours ECE 4-4
      An overview of the record keeping requirements for all services 11-1
      Information on funding claim audits and record keeping audits 11-2
      Information or instructions for financial reporting 12