Appendix to circular 2018/01 - Payments by parents of students in schools: Further information


The right to free enrolment and free education

Section 3 of the Education Act 1989 (the Act) states that every domestic student is entitled to free enrolment and free education at a state school or partnership school kura hourua from the person's 5th birthday until 1 January following the person's 19th birthday1.

This means schools cannot charge domestic students a fee for enrolment or attendance, or for delivery of the curriculum. The only exception to this rule is that proprietors of state-integrated schools can charge attendance dues.

Proprietors of state-integrated schools

Section 447 of the Act enables proprietors to collect attendance dues once those dues have been approved by the Minister of Education and notified in the New Zealand Gazette. The attendance dues are compulsory. Section 449 states that non-payment may result in Court action, and the principal of the school may suspend a student and remove that student’s name from the school register if the dues are not paid.

Section 451 makes provision for proprietors to seek contributions (donations) for any purpose. Those contributions must be voluntary. Proprietors must make audited accounts of those contributions available on request to parents and other contributors.

Payment types

There are three types of payments made to schools by parents – donations, purchase of goods and services, and attendance dues.


Payment is voluntary. Donations can be for general purposes, or for a specific purpose such as library books or sports equipment.

They can be requested, but payment cannot be compelled or enforced. It must be made clear that donations are voluntary.

GST is not payable on donations, and tax credits can be claimed.

Purchase of Goods and Services

Payment must be made for the purchase of goods or services, but only after a parent has freely chosen to make the purchase.

Schools must provide students and parents with information on any charges before they agree to receive goods or services.

GST is payable, and tax credits cannot be claimed.

Attendance Dues

Attendance dues are compulsory, and payable to the proprietor of a state-integrated school. This is the only instance of a compulsory charge in schools. Payment can be enforced.

The level of attendance dues must not be greater than the amount approved by the Minister of Education and published in the New Zealand Gazette. There can be no interest charged for unpaid dues. A bond cannot be requested.

GST is payable, and tax credits cannot be claimed.

Item categories

There is a wide range of items or activities for which payments may be sought in schools. These items fall into four categories – enrolment, curriculum, goods and services, and compulsory.


It is unlawful to charge or compel any payment for anything associated with the enrolment process.

Schools that do not have an enrolment scheme may seek donations towards enrolment costs. Care needs to be taken to ensure parents do not perceive that the donation is a necessary part of the enrolment process.

Schools with enrolment schemes can no longer seek donations towards enrolment costs. A July 2017 amendment of the Secretary’s Instructions makes the seeking of donations for out-of-zone enrolment activities unlawful2. This is currently the only exception to the general guidance that donations can be sought for any purpose.


It is unlawful to charge or compel any payment for anything associated with delivery of the curriculum.

Donations may be sought for curriculum items.

Goods and services

It is lawful for schools to charge for goods or services where these relate to items or activities outside of the curriculum. Parents must not be placed under an expectation or obligation to purchase/sign up. Purchasing/signing up is voluntary.

Schools can demand payment only when there has been clear agreement to acquire the goods or services. In the absence of an agreement, any demand for payment is unlawful. Unless parents agree to purchase goods and services, they will not be liable for any payment.

Schools may also ask for, but cannot insist on, payment in advance for various goods or services it knows are likely to be provided during the year.


Attendance dues for state-integrated schools are the only compulsory payment in the school system.

Provision of information for parents

All parents should be given clear information showing which payments are enforceable and which are voluntary. At the beginning of the school year, or on a student’s enrolment, parents should be made aware of the school’s policy about the request for donations and other forms of payment.

When referring to donations, schools must not use the words “fee”, “levy”, or “charge”, or any other term which implies that payment is compulsory. Schools should not indicate that it is compulsory to buy goods and services.

Notices or reminders which are poorly set out, or where items are not correctly described, can cause confusion. In prospectuses, website information, and notices to parents, schools must clearly distinguish between charges and donations.

In state-integrated schools, it must be made clear which payments are being sought by the board of trustees and which are being sought by the proprietor.

Except for attendance dues in state-integrated schools and charges for goods or services in all schools, all other requests for payment should indicate clearly that they are a request for a donation and accordingly are voluntary.

Parents should be advised that tax credits can be claimed for donations.

Some schools have related Trusts which raise funds on behalf of the school. In information provided to parents and the wider community it needs to be clear for what and for whom the funds are being raised.

When specifying and collecting donations, schools may find it useful to take the following steps:

  • specify the amount of a donation in the school prospectus or in an information letter to parents.
  • state that the donation is voluntary.
  • describe what the donation(s) will be used for.
  • state how and to whom payment is to be made.
  • state how and when a receipt will be provided (needed for tax credit purposes).
  • advise how parents can pay for donations and charges – whether by cash, cheque, credit card, automatic payment, internet banking or EFTPOS; in lump sum or monthly, fortnightly or weekly payments, or via payroll giving3.

Some key issues for schools and parents

Subject fees

The right to free education guaranteed by Section 3 of the Act means that there should be no charges associated with the delivery of the curriculum. In turn, this means that subject fees are unlawful.

As examples, it is unlawful to charge a fee for Year 12 Geography or Year 7 Technology – but it is acceptable to ask for a donation towards the school’s costs associated with those courses.

Take-home component

Schools can apply a charge where a student has chosen to buy and take home an item. As with the supply of any good or service, schools can demand payment only when there has been clear agreement to pay for the take-home item.

A student or parent is never obliged to buy any item produced at school.

Schools cannot refuse to register a student on a course on the grounds that the student has not agreed to pay for a take-home item.

Seeking agreement to pay donations

It is unlawful for a school to ask parents to sign an agreement to pay donations, which implies or imposes an obligation to pay. Such an agreement has the effect of “contracting out” of the right to free education guaranteed by section 3 of the Act, which would be both illegal and unenforceable.

School policies and processes

Schools should have policies and processes covering requests for and collection of payments, and should ensure that teachers and parents are aware of these policies.

Specialist units

A number of schools have specialist units to provide alternative means of delivering the curriculum. Examples include Montessori, Arrowsmith, and Samoan language immersion.

As these units are a means of curriculum delivery, it is unlawful to compel parents to make any payment to enable students to participate. It is also unlawful to require or to ask parents to sign an agreement to pay (see ’Seeking agreement to pay donations’ above).

It is lawful to ask parents to make a donation towards costs, but no students can be excluded from participation because of their parents’ inability or unwillingness to pay a requested donation.

Relief teachers

Payments cannot be requested to meet the cost of relief teachers during a school camp or during other activities associated with delivering the curriculum or assessment of students.

Lunches for day students

Schools with boarding hostels are able, if they wish, to provide meals to day students. This is an example of the purchase of goods and services. As such, the purchase must be voluntary, and students should be able to freely opt in to the meal programme rather than be compelled to sign up.

Fundraising by Proprietors

Under Part 33 of the Act, Proprietors may fundraise. This means Proprietors of state-integrated schools may request donations. Parents cannot be compelled, however, to pay donations or to become involved in fundraising activities.

Schools’ financial management of payments


Requests for payment must make a clear distinction between attendance dues, charges, and donations - and between board of trustees’ and proprietors’ items.

Ideally, invoices should specify attendance dues (for state-integrated schools) and charges for agreed optional goods or services only. Strictly speaking, schools cannot “invoice” donations, as non-payment of donations does not give rise to a debt that is owed. On the other hand, it can make practical sense to list all requests for payments in a single document. In such cases, it must be made very clear which payments are voluntary and which are not.

It is misleading to include a donation within a total which is described as ‘Balance Due’, or as being owed by a family.

As charges for curriculum items are unlawful, they should not appear on an invoice.

Recording donations

Schools should not record unpaid donations in accounts receivable. As donations are voluntary, the school has no right to them. Consequently, unpaid donations do not form part of the assets of the school.

State-integrated schools

Attendance dues and donations to a proprietor must be accounted for separately from board of trustees items, since they are the income of the proprietor, and not of the board. In particular, there must be no suggestion that attendance dues and donations are one and the same thing.

Donations and charges may be collected by the proprietor on behalf of the board of trustees, and vice versa. Schools need to ensure they have sufficient controls to ensure all funds end up in the correct entity. It is essential that cash collected by one entity on behalf of the other is paid over to the other party as soon as practicable. Boards and proprietors should not nett off amounts owed to the different parties.

Proprietors may donate their funds (except attendance dues) to any entity, including boards of trustees. But it is unlawful for a board of trustees to donate its funds to any entity, because those funds are public money which must be used only for legitimate purposes in accordance with the board’s functions and responsibilities set out in the Act.

Public money

Payments (including donations) become part of board of trustees’ funds once given to the school, and thus become public money. They must be accounted for and spent by the board in accordance with the board's normal legal responsibilities.

Payroll giving

Boards of trustees automatically have approved Inland Revenue donee organisation status and so are eligible for payroll giving


  1. Students with a relevant Section 9 Agreement including those in the Ongoing Resourcing Scheme (ORS) can stay at school to the age of 21.
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