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

7-1 Funding for new services

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  • Introduction
    • This section is for new ECE services. It explains:

      • the RS3 Initial Application for Funding for an Early Childhood Service
      • the funding process for new services
      • when new services can expect their first funding payment.
  • Funding process
    • The table below describes the funding process for newly licensed services:

      StageDescription
      1 The new service is licensed.
      2 The new service completes the RS3 Form
      3 The new service returns the RS3 Form to their Ministry regional office. 
      4 The Ministry calculates the service’s first payment based on:
      • the number of days the service will be open and
      • the funded hours that the service will be open and
      • the average number of children in each age group and the hours they are expected to attend the service during the advance period and
      • the estimated percentage of regulated (ratio) staff hours that will be covered by certificated teachers (teacher-led centre-based education and care services only).
      5 The Ministry makes an advance payment to the new service on the next available payment date. 
      6 The service becomes part of the normal funding cycle. Funding continues as for all services (see Section 2-5 for further details). 
  • Bank account details
    • Every funded service must have a bank account into which ECE funding can be paid.

      The bank account number must be verified by:

      • two signatories on the RS3 Form and
      • a bank verification stamp on the RS3 Form or
      • attaching a pre-printed bank deposit slip to the RS3 Form or
      • attaching a document printed on bank letterhead, with the bank account number visible, to the RS3 Form.
  • Service Providers
    • If a service provider operates more than one service, funding for all services will be paid to the bank account of the service provider.

      All funding correspondence will be sent to the funding contact person for the service provider.

  • Services affiliated to a school
    • New services that are affiliated to, or located on the grounds of, a state or integrated school must ensure they are a separate legal entity, and have a separate management structure and bank account to that of the school.

      Boards of trustees of state or integrated schools wishing to open an early childhood education (ECE) service must establish a separate legal entity for the ECE service.

  • Tip
    • Red lightbulb tip symbol

      A good business practice for community groups wanting to start a new ECE service (e.g. a university or church) is to open a separate bank account for the ECE service.

      This keeps the financial records of the community group and the ECE service separate. 

  • First payment
    • New services are eligible for funding from the day that they are licensed and operating.

      To find out when you will receive your first payment, please contact your Ministry regional office.

      Services should budget to ensure funds are available to cover the period between starting to operate and receiving their first payment.

  • Warning: to avoid overpayment of funding
    • The Ministry retains the right to reduce any advance funding due to be paid to you where it deems the claimed numbers on the RS3 to be over-estimated.

      The Ministry retains the right to request proof and evidence to support the numbers claimed on the RS3 form.

      Any overpayments that occur due to over-claims on this RS3 form are repayable to the Ministry immediately.