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

13-1 What is Targeted Funding for Disadvantage?

Targeted Funding

Targeted Funding is a targeted funding mechanism for all licensed early learning services. Targeted Funding is paid to eligible early learning services in addition to the ECE Funding Subsidy, 20 Hours ECE and Equity Funding.

Key objective

The objective of Targeted Funding is to improve educational equity by improving the quality and affordability of early learning for children/tamariki from disadvantaged backgrounds. 

'Tagged Funding'

Targeted Funding is ‘tagged’.  This means that it is identifiable as an amount additional to a service’s ECE Funding Subsidy, 20 Hours ECE and Equity Funding.

Targeted Funding must be spent on activities, staff or equipment that will benefit children/tamariki from disadvantaged background. 

The Guidelines for Targeted Funding [PDF, 681 KB] detail the areas Targeted Funding must be spent within.

When is funding paid?

Eligible early learning services will receive Targeted Funding in three instalments each year alongside the ECE operational funding payments (i.e. March, July and November).

What period does it cover?

In 2018, Targeted Funding is provided for the period 1 January 2018 to 28 February 2019.

For all subsequent years, Targeted Funding is provided for the period 1 March to 28/29 February the following year. 

How is it calculated?

Targeted Funding is based on an estimate of the number of Funded Child Hours (FCH) generated by children/tamariki from disadvantaged backgrounds in eligible early learning services. These are referred to as Targeted Hours.

The 20% of children/tamariki attending early learning services who have spent the largest portion of their life as the dependent of a beneficiary are considered to be from disadvantaged backgrounds.  This is for the purpose of the funding calculation only.

All Targeted Hours in eligible early learning services generate a fixed amount of funding. For additional information on the funding calculation process, see our website.

When is it calculated?

Each year, the Ministry will calculate the Targeted Funding entitlement of all eligible early learning services.  Any change in funding entitlement will be effective from the start of the next funding period on 1 March.

All early learning services will be assessed for their eligibility each year. There is no application process required.

The Ministry will notify eligible early learning services of their Targeted Funding entitlement in February each year.