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

2-4 When and how funding is paid

A symbol.  Books.

  • Introduction
    • Funding payments are made three times a year – on the first working day of March, July and November.

      Each payment is made up of an advance for the next four months and a ‘wash-up payment’ for the previous four months.

  • Advance funding
    • ECE services receive an advance for four months. Information on initial funding for new services can be found in Section 7-1 of this Handbook. The following table explains how the advance payment is calculated:

      StageDescription
      1 ECE service completes an RS7 Return with:
      • the number of funded child hours per day for the previous 4 actual months
      • the expected number of days of operation for the coming 4 months
      For more information on completing your RS7 Return please see Chapter 9 of this Handbook.)
      2 The Ministry uses the RS7 Return data to calculate the average number of funded child hours (FCHs) per day over the previous four months for each type of FCH – Under Two, Two and Over, 20 Hours ECE and Plus 10 ECE.
      3 The Ministry multiplies the average number of each FCHs per day by the number of days the service expects to be open over the coming four months.
      4 The Ministry multiplies the average FCHs for the coming four months by the service’s funding rate.
      5 Seventy-five per cent of this total is paid as the advance payment (or 100 per cent for kindergartens).
  • Wash-up funding
    • ECE services also receive a wash-up payment. The wash-up payment makes up the difference between the advance payment made in the previous funding payment and the actual funding entitlement.

      If ...Then ...
      The predicted average number of FCHs was more than the actual average number of FCHs, or the service’s funding rate has decreased the Ministry deducts the overpaid amount from the next future payment.
      The predicted average number of FCHs was less than the actual average number of FCHs, or the service’s funding rate has increased the Ministry pays the extra amount with the wash-up payment.
  • Actual funding entitlement
    • A service’s ‘actual funding entitlement’ is the amount the service is actually paid in a funding round:

      advance funding ± wash-up funding = actual entitlement

  • Service providers
    • If a service provider operates a number of services, the total funding for all those services is paid to the service provider.

      Payment to individual services is the responsibility of the service provider.

  • Funding cycle
    • Funding is paid three times a year, on the first working day of the following months:

       Is made up of the ... 
      Payment in...

      Advance for ...

      wash-up for...

      March

      March

      April

      May

      June

      October

      November

      December

      January

      July

      July

      August

      September

      October

      February

      March

      April

      May

      November November

      December

      January

      February

      June

      July

      August

      September

  • ’Gap’ months
    • Processing time means it is not possible to collect FCH figures for the month prior to each funding payment. Although the advance has been paid, there will be a delay before the wash-up payment is made for February, June and October. These months are known as the ‘gap’ months at the time of processing.

      Use the table above to find out when the wash-up payment for February, June or October will be paid.

  • Enquiries regarding the bulk funding payment
    • Due to privacy laws and difficulties verifying the identity of the person calling, the Ministry of Education is no longer able to provide payment totals in advance over the telephone or via email. Advice notices are posted to services on the payment date.