Budget 2020: 100% funding band restored for early learning

As part of Budget 2020, Minister Hipkins announced that a higher funding band will be reinstated for teacher-led, centre-based services that employ a fully qualified and certificated teaching workforce (the ‘100% funding band’).

This reflects the Government’s commitment to quality early learning, and will:

  • Encourage more centres to operate with fully qualified and certificated teachers, and improve the quality of teacher-child interactions in ECE.
  • Benefit more children, as teacher-led centres comprise 82% of all enrolments.
  • Help maintain employment opportunities for qualified and certificated teachers in a COVID-19 environment. 

The 100% funding band aligns with a Government commitment from the 2017 Speech from the Throne(external link) to fund Early Childhood Education (ECE) centres to employ qualified and certificated teachers. It also aligns with Action 3.1 in the Early Learning Action Plan (part of the Cabinet agreed Education Work Programme), which recommends incentivising for 100 percent and regulating for 80 percent qualified teachers in teacher-led centres, leading to regulation for 100 percent. 

The 100% funding band will apply from 1 January 2021. (The first payment will be in November 2020 as advance funding to cover January and February 2021.) 

Funding rates from 1 January 2021

 Service type

Funding band

Under 2s


20 Hours ECE

Kindergartens (all-day)

100% qualified




80-99% qualified




Education & care centres (all-day)

100% qualified




80-99% qualified




Education & care centres (sessional)

100% qualified




80-99% qualified




Questions about the 100% funding band

Will teachers on non-contact time count toward the 100% definition?

No, non-contact time will not count. The current funding rules will continue to apply, just with a 100% threshold. To qualify, 100% qualified and certificated teachers must cover regulated (ratio) staff hours during a funding period. However, there is still some leniency with discretionary hours.

How were the new 100% funding rates calculated?

The same funding difference for 80-99% and 100% funding rates from 2010/11 was added to 80%+ education and care centres’ funding rates from 1 January 2020, and kindergarten funding rates from 1 July 2020. This creates a distinct price differential for centres using 80-99% certificated teachers and centres with 100% qualified and certificated teachers.

Why are 100% funding rates not set to a higher level?

The new 100% funding band is set at a level which is expected to encourage more teacher-led centres to operate with a fully qualified and certificated workforce.

Why are you making this change now in the midst of the COVID 19 pandemic?

The funding supports the reset and revitalisation of the economy that constitutes the Government’s response to COVID-19. The funding is expected to continue demand for qualified and certificated ECE teachers in teacher-led centres.

This is expected to flow into spending across the economy and help offset decreased spending resulting from COVID-19 impacts.

In 2019, 163,000 (82%) children participating in early learning attended a teacher-led centre. Better supporting children’s wellbeing will help them cope with the social and economic impacts of COVID-19.

Why did you prioritise the teacher pay initiative over the reintroduction of the 100% funding band?

Improving teacher pay in education and care services is expected to increase the salary levels for more teachers in the short term, than reinstating the 100% funding band. Increasing teacher salaries should also help mitigate the financial impact of COVID-19 for some families.

What will this mean for centres already operating with 100% qualified and certificated teachers?

Centres already employing 100% qualified and certificated teachers could use the extra funding in a myriad of ways, which would facilitate further economic activity. For example, extra funding could be used to maintain and develop property, increase teacher salaries and reduce parental fees.

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