Targeted Funding for Disadvantage

Targeted Funding for Disadvantage is for early learning services that have a high proportion of children from disadvantaged backgrounds. We fund these services to help make early learning affordable and high-quality, and to give the children the opportunity to start school ready to learn. There are eligibility, funding and other requirements.

Level of compliance Main audience Other


  • All Early Learning Services
  • Service Managers
  • Parents, Caregivers and Whānau
  • Educators, Teachers and Kaiako

This guidance informs early learning services of key dates and requirements that they must adhere to when receiving Targeted Funding for Disadvantage.

What services are eligible?

The following services are not eligible to receive Targeted Funding for Disadvantage:

  • casual education and care services
  • hospital-based services
  • certificated playgroups
  • early learning services and ngā kōhanga reo with less than 20% Targeted Hours as a proportion of total Funded Child Hours (this recognises that services with higher proportions of children from disadvantaged backgrounds have additional challenges).

For further eligibility questions, refer to the FAQ’s section of this page.


The Ministry of Education has published guidelines for Targeted Funding for Disadvantage. 

The guide states:

  • the four key areas in which you must spend the funding
  • evidence-based examples to help decide how to allocate funds
  • suggested planning and review processes for funding
  • a list of expenses that the funding cannot be used for.

Reporting requirements

Reporting is required each year for services and ngā kōhanga reo that receive $2,000 or more. Reporting must be completed at a licence level, but umbrella organisations can collate the reporting templates of their individual ECE services or ngā kōhanga reo and supply them to the Ministry on their behalf.

Report online through the following link.

Alternatively if you prefer to submit your report on a written form, please contact for a template.

Key dates

Reporting is due to the Ministry of Education on 1 February the year after funding is received. This relates to funding received for the previous calendar year.

Funding Handbook 

Chapter 13 provides further information on Targeted Funding. This includes how early learning services and ngā kōhanga reo are able to pool Targeted Funding.

Service closures or suspensions

To be entitled to the full amount of Targeted Funding, ECE services and ngā kōhanga reo must not close or be suspended during the period that Targeted Funding is provided for.

If an ECE service or kōhanga reo closes or is suspended after receiving Targeted Funding, they will not receive any additional payments.


How will the Ministry identify children from disadvantaged backgrounds?

For the purpose of the funding calculation, the 20% of children attending ECE who have spent the largest portion of their life as the dependent of a beneficiary are considered to be from disadvantaged backgrounds.

How is funding calculated?

Funding is based on an estimate of the number of Funded Child Hours (FCH) children from disadvantaged backgrounds will generate in each early learning service in the coming year – these are referred to as Targeted Hours.

Is additional funding supplied for each Targeted hour?

Similar to how Equity Funding Component A is provided, eligible early learning services and ngā kōhanga reo will receive additional funding for each Targeted Hour. The funding rate per Targeted Hour will be determined in December 2017 and will remain fixed unless a decision is made to change it as part of the annual Budget process.

Is funding an entitlement generated from past attendance?

No. Funding is based on an estimate of future attendance and need. It is not an entitlement generated from past attendance.

Is Targeted Funding for Disadvantage a separate funding stream?

Yes. Targeted Funding for Disadvantage is separate to other funding streams, such as Equity Funding and general ECE subsidies.

  • Targeted Funding for Disadvantage will show up as a separate item in funding notices.
  • Targeted Funding will not impact the level of Equity Funding you receive. This initiative complements and does not replace Equity Funding Component A in its objective of reducing educational disparities in New Zealand.

Are there any restrictions on the use of Targeted Funding?

Yes. Targeted Funding cannot be used for general operating expenses or profit. These restrictions are detailed in Chapter 13 of the ECE Funding Handbook(external link).

How often will funding be re-calculated?

In December each year, the Ministry will calculate the amount of funding ECE services and ngā kōhanga reo will receive in the coming year. You do not need to apply to be included in this process. On 1 February each year, those entitled to funding will receive a letter with their funding entitlement for the coming year.

Any change in funding entitlement will be effective from the first working day of March. Funding is likely to fluctuate year to year, due to changes in attendance.

Will I be told which children are from disadvantaged backgrounds?

No. To protect the privacy of individual children and avoid the risk of stigmatisation, we will not identify which children are considered to be from disadvantaged backgrounds.

The Ministry’s expectation is that ECE services and ngā kōhanga reo use their professional judgement to identify and support children that require additional support due to their background.

What information will be communicated to ECE services and ngā kōhanga reo?

On 1 February each year, ECE services entitled to Targeted Funding will receive a letter from the Ministry detailing their funding entitlement for the coming year.

On 1 February each year, the Ministry will advise the Te Kōhanga Reo National Trust of all kōhanga reo entitled to Targeted Funding and their funding entitlement for the coming year. The Trust will then notify each eligible kōhanga reo individually of their entitlement.

What information is used to estimate attendance?

Our estimate of attendance for the coming year is based on FCH data submitted in the RS7 Funding Return / Maramataka for Kōhanga Reo. If an ECE service and ngā kōhanga reo does not have a full year of attendance data, we will adjust our estimates to account for this.

What data needs to be submitted to the Ministry?

You must submit your RS7 return / Maramataka for the months between June and September of each year to be included in the calculation estimates for the coming year. ELI data should be up-to-date by November as it is also used in the calculations.

How will the Ministry protect privacy and data security?

As part of this initiative, the Ministry has completed a Privacy Impact Assessment as per the best practice guidelines published by the Privacy Commissioner.

Payment dates and coverage

Funding is paid in three equal instalments each year in line with the ECE operational funding cycle (March, July and November).


Payment date

Period funding is provided for 


March payment 

1 March – 30 June 


July payment 

1 July – 31 October 


November payment 

1 November – 28 Feb (or 29 Feb on leap years)

Payment of funding may be delayed if you have not submitted your RS7 Funding Return / Maramataka. 

Review of equity and targeted funding in early learning

Targeted Funding for Disadvantage is currently being reviewed by the Ministry in response to Action 2.1 of He taonga te tamaiti - Early Learning Action Plan(external link).

You can read more about this work on Review of equity and targeted funding in early learning.

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