ECE Funding Handbook

Welcome to the Early Childhood Funding Handbook. This Funding Handbook is issued under section 311(5) of the Education Act 1989. The funding paid to licensed services is paid subject to the terms and conditions set out under this Handbook and must be complied with. The terms used in this Handbook are based in the Education (Early Childhood Services) Regulations 2008.

This Handbook is designed to be a ‘one-stop-shop’ for all you need to know about early childhood funding, including:

  • the Early Childhood Education (ECE) Funding Subsidy
  • 20 Hours Early Childhood Education (ECE)
  • Equity Funding
  • the Annual Top-Up for Isolated Services

Note: The information in the Funding Handbook does not apply to certificated playgroups. These services should contact their Ministry regional office for further information.

Downloading the ECE Funding Handbook

If you want a printed copy of this handbook, refer to the list of downloads in the contents section where you will find downloadable PDF versions of each chapter.

ECE Funding Handbook downloads

Licensing Criteria Cover

10-2 Component A: Low socio-economic communities

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  • Objective
    • The objective of Component A: Low socio-economic communities is to target funding to ECE services that provide education and care programmes to children from low socio-economic communities.

  • The Equity Index
    • Eligibility for Component A is based on the Equity Index (EQI). This index measures the extent to which a service draws children from low socio-economic communities.

      The EQI is worked out on the basis of enrolled children’s addresses and information taken from the New Zealand Census (issued every five years). The EQI for casual services is determined using the average for all other ECE services in the same area.

      The EQI is updated every five years, in line with the New Zealand census cycle.

  • Eligibility for funding
    • Licensed ECE services with an EQI of 1, 2, 3 or 4 are eligible to receive Component A Equity Funding.

  • Your EQI
    • Your service’s EQI is found on your service’s Early Childhood Education Funding Notice.

  • How is funding calculated?
    • The level of funding paid to each eligible service is determined by:

      • its EQI and
      • the funded child hours claimed by the service in the RS7 Return process.

      Each actual funded child hour is multiplied by the relevant funding rate.

      As with the ECE Funding Subsidy, Equity Funding may not exceed six hours per child-place per day (or per child for 20 Hours ECE), to a maximum of 30 hours per child-place per week (or per child for 20 Hours ECE).

  • Applications
    • Applications for Component A are not necessary. The Ministry of Education calculates the EQI for each licensed ECE service and notifies services that are eligible for funding.

      For an EQI to be calculated, each service must provide certain details about the children enrolled in the service and their families. This information is collected at two points in the year. The Ministry will contact new services when the information is being collected.

      If your service has...then you should...
      recently opened

      wait to be contacted by the Ministry of Education.

      Your service will automatically be included in the next ‘new service’ process. You will be contacted by the Ministry with details of the information you will need to provide, and instructions for how to gather this.

      had a change of service provider  contact the Resourcing Contact Centre. They will ensure that you are contacted at the time of the next ‘new service’ process. 
      previously chosen not to have an EQI calculated, but would now like to.  contact the Resourcing Contact Centre on 0800 ECE ECE (0800 323 323). They will ensure you are contacted at the time of the next ‘new service’ process. 
  • Applying for a review of your EQI
    • A new service can apply for a review of their initial EQI rating once only in their first year of operation either in March or July.
      Services with an EQI of 2, 3, 4 or 5+ are eligible to apply for a review of their EQI if they are able to provide evidence that:

      • the service’s community profile has changed significantly since their EQI was issued or
      • the service’s individual catchment area has changed significantly since their EQI was issued.

      The review of EQI process is available once a year. For more information please contact the Resourcing Contact Centre on 0800 ECE ECE (0800 323 323).

  • Expenditure
    • All Equity Funding is ‘tagged’ and must be spent with the equity objectives for participation and quality in mind.

      Below are some suggestions for uses of Component A funding:

      • purchase additional curriculum resources and an increased range of supplies
      • subsidise learning experiences outside the service
      • meet children’s nutritional needs
      • provide assistance to attend the service (e.g. transport assistance)
      • provide extra professional development for staff and extra education for families/whānau
      • improve learning spaces
      • help staff to train or upgrade their qualifications
      • reimburse expenses of voluntary helpers
      • introduce staff recruitment and retention initiatives
      • promote the availability of the service within the community.

      These are just some examples of ways that Component A Equity Funding can be used.