Circular 2021/03 — Payments by parents of students in schools

Date 8 November 2021 | Circular 2021/03 | Category Financial Governance

This circular is about Requests for payments by schools and kura.

This circular replaces Circular 2018/01 issued June 2018.

The action needed is Ensure current practice is consistent with advice provided in this circular.

It is intended for Parents of students in schools, school boards and principals of schools, proprietors of state-integrated schools, sponsors of partnership schools kura hourua.

For more information about this circular Direct any inquiries about this circular to the national office of the Ministry of Education or your local Ministry of Education School Finance Adviser.


This circular provides advice on the rights of parents, students, school boards, proprietors, and sponsors about requests for donations and other forms of payment in schools.

The previous circular on payments by parents (Circular 2018/01) has been updated to reflect the introduction of the school donations scheme in the Education (School Donations) Amendment Act 2019 which came into force on 22 October 2019. From the 2020 school year, decile 1-7 state and state-integrated schools have been able to choose to receive a $150 per student, per year payment if they agree not to ask parents and caregivers for donations. Additionally, references to the Education Act 1989 have been updated to reflect the Education and Training Act 2020.


In this circular:

  • curriculum means The National Curriculum composed of The New Zealand Curriculum and Te Marautanga o Aotearoa. In the case of a partnership school kura hourua, it means the curriculum agreed to in the contract between the Crown and the sponsor
  • parent includes guardian or caregiver
  • schools mean state schools and kura (integrated or non-integrated) and partnership schools kura hourua, or their school boards, sponsors, or proprietors – as the context requires.

Structure of this Circular

This circular has key information for parents and schools, including an appendix with further information as well as links to where you can find additional information around examples of different types of payments.

Key information for parents and schools


If a school chooses to opt-in to the donation scheme, it cannot ask for donations, with the exception of overnight camps.

If a school is not in the donations scheme, it can ask for donations (for either general or specified purposes).

Parents may:

  • pay donations in full, in part, or not at all. Paying donations is a choice.

Schools must:

  • clearly indicate to parents that payment of any requested donation is voluntary 
  • inform parents that they may claim an income tax credit from Inland Revenue in relation to donations made to the school.

Schools cannot:

  • describe voluntary contributions or donations as “fees”, “charges”, or “levies”
  • make a request for donations in a form or manner that implies an obligation to pay
  • apply interest charges to unpaid donations
  • offer a discount on early payment of donations, as a discount implies the payment is a compulsory charge.


Schools cannot:

  • charge parents for information about enrolment
  • demand any form of payment to confirm enrolment
  • include donations as part of a checklist of enrolment forms or show them as a step in the enrolment process.

Goods and services

Schools may:

  • sell goods or services to students or families.

Schools must:

  • ensure that prior agreement is received before any charges are made for supplying goods or services.

Parents must:

  • pay for goods and services they have agreed to purchase/sign up for.

Schools cannot:

  • demand payment of any bonds, insurance, membership fees or levies
  • levy parents for any operational costs like heat, light and water charges
  • compel parents to buy items from the school.


Schools cannot:

  • charge a fee to cover the cost of either tuition or materials used in the provision of the curriculum
  • exclude students from trips or activities that are part of curriculum delivery because of their parents’ inability or unwillingness to pay a requested donation
  • compel students to take part in fundraising for curriculum-related matters
  • charge for tertiary-level courses that are purchased by the school and then offered as part of the school programme for senior students.

Enforcing payments

Schools may:

  • remind parents (particularly at the end of a year) of amounts of any debt owed or a donation the school would like to receive. Schools should take care to differentiate between repeated requests for a donation, and actual debts relating to items or activities for which a student or family agreed to pay or the non-payment of attendance dues.

Schools cannot:

  • withhold information or privileges because a parent has not paid a donation
  • alienate students because parents have not paid a donation
  • pressure parents into making a voluntary purchase or donation
  • mislead parents in any way as to the nature of payments included in payment or reminder notices
  • use debt collection methods to attempt to compel the payment of donations, such as issuing “late payment” notices, or other forms of communication warning of any adverse consequences of non-payment.

Parents and schools should also note that:

  • students, or their families, should never be pressured or otherwise made to feel embarrassed over non-payment of either a debt or a requested donation
  • where a family has agreed to buy a good or service, then a normal debt has been incurred and may be enforced if unpaid
  • the public identification in any way of parents who have or have not made a donation is improper and likely to breach the Privacy Act 2020. Similarly, any debt owed should be treated as a private and confidential matter between the school and the family concerned
  • no student should be harassed or denied information or privileges because a parent has not paid a donation. Any action designed to pressure parents into making a donation could be seen as a contravention of the Education and Training Act 2020 (the Act)
  • linking the provision of certain items or activities such as the school magazine, student identity cards, free registration on Mathletics, or subsidised travel for sports teams directly to the payment of the donation may affect the tax treatment of the payment. It could indicate that the school donation is not a gift made to benefit the school, but instead is a payment for goods and services. This could mean that donation tax credits cannot be claimed and the school must pay GST
  • withholding an item can have other consequences – for example, if the student ID card is used as a swipe card to enable students to borrow library books, to withhold the card from students whose parents have not paid the school donation would have the effect of denying the student a privilege that is available to other students
  • schools cannot withhold information1 or items such as reports or certificates to encourage parents to pay a donation or to resolve unpaid debts. Schools are required by the National Education Guidelines to report on student progress and students have a right to access personal information held by the school without charge
  • proprietors of state-integrated schools can charge attendance dues. This is the only compulsory payment in the school system.

Further advice and guidance


If parents have concerns regarding payments sought by schools, the first approach should be to the principal, then to the school board, proprietor, or sponsor (as the case may be).

Parents can also seek advice from the Student Rights Service (formerly the Parents Legal Information Line) on 0800 499 488. The Student Rights Service is a national, free phone service for parents and students wanting information and assistance on issues for children and young people at school.


Principals and school boards can contact the New Zealand School Trustees Association, or their local Ministry of Education School Finance Adviser.

Information from Inland Revenue

Inland Revenue has reissued its goods and services tax - payments made by parents to state and state integrated schools guidance.(external link)

Inland Revenue has developed advice and guidance about tax credits for donations made to schools - guidance for state schools(external link) and the guidance for state-integrated schools.(external link)

Issued by

Natasha Barnett
Pou Whakahaere ā-Roopu | Group Manager, Resourcing | Te Pai Aronui
Te Tāhuhu o te Mātauranga | Ministry of Education
National Office, Mātauranga House, 33 Bowen Street,
P O Box 1666, Wellington, New Zealand. Phone 04-463 8000, Fax 04-463 8001


  1. In responding to requests under either the Official Information Act 1982 or the Privacy Act 2020 schools should be aware that non-payment of a debt or a donation would not be regarded as sufficient reason to withhold information from a requester.

Appendix to Circular 2021/03 - Payments by parents of students in schools: Further information


The right to free enrolment and free education

Section 33 of the Education and Training Act 2020(external link) (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 that state 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

Clause 30 of Schedule 6 to the Act(external link) 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. Clause 32 of Schedule 6 to the Act 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.

Clause 34 of Schedule 6 to the Act(external link) makes provision for proprietors to fundraise within the school. It also provides for proprietors to seek regular financial contributions (donations) from parents for the purpose of enabling the proprietor to meet any debt, mortgage, lien, or other charge associated with the land and buildings that constitute the school premises or are associated with the school. 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.


Schools that are not in the donations scheme can ask for donations. Donations can be for either for general or specified purposes (for example, library books or sport equipment). 

It must be made clear that donations are voluntary. Payment cannot be compelled or enforced. 

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

Schools that are part of the donation scheme cannot ask for donations with the exception of overnight camps.

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 school board 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 33 of the Act(external link) 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 33 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. Where the school has opted-in to the school donation scheme, donations cannot be requested with the exception of overnight camps.

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 Schedule 6 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 school boards 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 school board 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 school board, 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 school boards. But it is unlawful for a school board 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 school boards 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

School boards 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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Further information

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