The Equity Index

A new way to identify, and respond, to socio-economic barriers in schools and kura.

About the Equity Index

Too many children and young people face barriers to educational achievement because of their socioeconomic circumstances and are not being adequately supported to reach their full potential.

We provide schools and kura with equity funding, in addition to their core funding, so they can work in different ways to reduce the impact socioeconomic factors have on student achievement.

We currently use the decile system to allocate equity funding and to identify schools that would benefit from additional resources.

However, a lot has changed since the decile system was introduced nearly 30 years ago. We have access to improved data and a better understanding of the socioeconomic factors that have the most impact on student achievement.

We’ve used this information to develop the Equity Index (EQI). From January 2023 we will use the EQI to determine a school’s level of equity funding.

Through Budget 2022 the Government has provided around a 50% ($75 million) increase in equity funding. So, we have more money, better targeted to address equity issues.

It is important to note that neither Deciles nor the EQI are measures of school quality. Rather, they are ways for us to understand the relationship between socio-economic circumstances and student achievement.

Equity Index: Summary of the 2023 numbers [PDF, 730 KB]

How the Equity Index works

To work out each school’s Equity Index number, our statistical model uses information held in Stats NZ Integrated Data Infrastructure (the IDI). This is made up of administrative data provided by other government agencies.

Data in the IDI is de-identified. This means information like names, dates of birth, and addresses has been removed. Numbers that can be used to identify people, like IRD and NHI numbers, are encrypted (replaced with another number).

Stats NZ Integrated Data Infrastructure (IDI) — stats.govt.nz(external link)

The model:

  • Looks at cohorts of children from the last 20 years, who have already passed through the school system. It assesses which socioeconomic characteristics observed at different ages best predict a student’s achievement in NCEA levels 1 and 2.
  • It then looks at the socio-economic characteristics of students enrolled at schools for the last three years and predicts how likely they are to achieve NCEA level 1 and 2.
  • Student numbers are averaged at an individual school level to produce an EQI number for each school between 344-569.

While most students will face challenges and obstacles at some point during their time at school, a higher EQI number indicates that a school has students facing more or greater socio-economic barriers.

Read more about how the Equity Index works

An Introduction to the new Equity Funding system for schools and kura [PDF, 771 KB]

How the Equity Index will apply to funding

Most resourcing (excluding property) for schools is delivered through:

  1. Staffing entitlement: We generate entitlement staffing for each school based on their roll size, school type and year levels of the student population.
  2. Operational grant funding: Funding provided to schools to cover their day-to-day operating costs. It is generated through several funding components, including additional funding to support students that face socio-economic barriers currently weighted by decile.

From January 2023, the decile-based funding components Targeted-At-Risk Funding (TARG) and Targeted Funding for Educational Achievement (TFEA) will be removed and replaced with a new category ‘Equity Funding’. The Special Education Grant (SEG) and Careers Information Grant (CIG) will also utilise the new EQI in lieu of deciles.

Read more about operational funding components

To limit annual funding fluctuations, we’re also changing the way we distribute equity funding.

We’re moving to a curved funding model to smooth out any annual shifts in funding schools might receive. Under the stepped model we used for deciles schools could receive significant shifts in funding if their decile rating changed.

The shift to the EQI will change the amount of equity funding some schools receive. Although overall funding is increasing, we expect some schools may qualify for less equity funding, given our ability to better assess the socioeconomic barriers their students face. Conversely, some schools will receive more equity funding.

We’ll provide transition funding to allow those schools which will lose funding time to plan and adapt. For the 2023 year no school or kura will receive less operational funding due to the EQI and Isolation Index changes. From 2024 any reduction in funding will be capped at 5% per annum of a school/kura’s 2022 operational grant, to ensure funding is phased out over time.

Read more about school funding

Removing deciles

Deciles measure socio-economic status in the areas where students live.

The system was introduced in 1995. Deciles are based on Census data and consider five socio-economic indicators about the areas students live in:

  • The percentage of households with income in the lowest 20% nationally.
  • The percentage of employed parents in the lowest skill level occupational groups.
  • The percentage of household that are crowded.
  • The percentage of parents with no educational qualifications.
  • The percentage of parents receiving income support benefits.

We are phasing out decile use from January 2023.

Frequently asked questions

FAQs — Equity Index

FAQs — Isolation Index Changes

Further information

Further information can be found on Equity Index.

If you have any questions or want more information, email the Equity Index team at equity.index@education.govt.nz.

News: Replacing Deciles with the Equity Index — 24 September 2019

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