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

3-B-4 Home-based ECE services

H symbol.  Compass.  Books

  • Introduction
    • Licensed home-based early childhood education (ECE) services provide education and care for up to four children under the age of six in either a caregiver/educator’s home, the child’s own home or a home nominated by the child’s parent.

      This section explains:

      • funding rates for home-based ECE services
      • the difference between standard and quality funding rates
      • when to change the service’s funding rate.
  • Funding claim exceptions
    • Funding must not be claimed for:

      • an educator’s own children
      • children who are present in the home but not enrolled in the home-based service or
      • children enrolled at school.

      If an enrolled child is absent from a home-based service and the educator, by contractual agreement, is not paid for absent children, the service provider cannot claim funding for that child for that day.

      If, however, the caregiver/educator, by contractual agreement, is paid for absent children, the service provider can claim funding for an absent child and the absence rules will apply.

      See Section 6-4 for more information on the absence rules.

      For funding purposes, an educator’s ‘own’ children includes children living with the educator in the educator’s home.

      ‘Own’ children does not include children who are placed with the educator as part of a Department of Child, Youth and Family (CYF) care arrangement, where the Chief Executive Officer of CYF is their legal guardian, and where CYF have referred the children and/or educator to a home-based service provider.2

  • Family members as educators
    • A home-based education and care service can claim funding for a child where the educator is a member of that child’s family and is living with the child in the child’s home only if all of the following requirements are met:

      1. the educator is part of a licensed home-based service, and
      2. the home is available for use by children who are not part of the educator’s family, and
      3. at least one child who is not a member of the educator’s family attends the home.

      A home-based service can only claim funding for the child who is a family member for the hours a child who is not a family member attends the home.

      For example: If a child who is not a family member attends the home for education and care for 15 hours per week, then the home-based service may claim 15 hours per week for each child who is a part of the educator’s family. Other children who are not part of the educator’s family may attend at different times in order to claim up to a maximum of 30 hours per week per child providing that the maximum number of children in home is not exceeded.

      Note: In exceptional circumstances, in isolated communities, (3) may be waived by the Ministry regional office.

  • Definition of family members
    • A family member is any member of the family other than the parent or caregiver of the child. Please refer to the section Funding Claim Exceptions for more information.

  • Home-based education and care declaration
    • Services are required to have a signed declaration for each child to indicate whether the educator who will be providing education and care for the child is a member of that child’s family.

      This declaration is part of the enrolment agreement example and can be found in Appendix 2.

  • Quality rate requirements
    • To be eligible for quality funding rates, home-based ECE services must meet the requirements of one of the following options:

       Option 1Option 2
      Service size Maximum of 60 children Maximum of 80 children
      Coordinator requirements Coordinators must meet the
      Quality rate requirements: coordinators
      Coordinators must meet the
      Quality rate requirements: coordinators
      Educator Requirements All educators in the service have completed one of the following:
      • at least 5 credits at a minimum of a Level 4 ECE qualification listed on the New Zealand Register of Quality Assured Qualifications
      • a completed Level 3 or higher ECE qualification listed on the New Zealand Register of Quality Assured Qualifications
      All educators in the service have completed one of the following:
      • at least 15 credits at a minimum of a Level 4 ECE qualification listed on the New Zealand Register of Quality Assured Qualifications
      • a completed Level 3 or higher ECE qualification listed on the New Zealand Register of Quality Assured Qualifications.
      Note: Educator requirements In addition to the educator requirements for Option 1, educators can be New Zealand Qualified primary school teachers. In addition to the educator requirements for Option 2, educators can be New Zealand Qualified primary school teachers.

      Note: The Ministry will only accept qualifications (listed in the table above) for home-based ECE quality funding if these are listed on the New Zealand Register of Quality Assured Qualifications.

      A full or part ECE qualification gained prior to 1 July 2011 will continue to be recognised for quality funding purposes until the end of the educator’s contractual agreement with the home-based service.

  • Quality rate requirements: coordinators
    • Coordinators of home-based ECE services receiving quality rate funding:

      • must be locally based (i.e. available, in person, within normal commuter distances and times for that location) and
      • must be on duty for the times specified in the table below, including over the lunch period.

      Coordinators must not provide cover for more than one service at a time.

      Services operating for more than six hours per day must have a coordinator who is...Services operating for six hours or less per day must have a coordinator who is...
      • on duty between 8:30am- 4:30pm Monday to Friday and
      • on-call to supervise home-based care before 8:30am, after 4:30pm and on weekends when education and care is provided by the service during these hours.
      • on duty for the hours that children attend the service.

      For funding purposes, “on duty” means that coordinators are:

      • mainly focused on, and involved in, supervising quality environments for educators and children in their service
      • able to instantly respond to educators and parents in their service ‘person-to-person’ (i.e. in person or by phone).

      ‘On duty’ does not include times when the coordinator cannot respond instantly to educators and parents in person or by phone.

  • Relief coordinators
    • When a coordinator of a service funded at the quality rate is unable to be on duty, another coordinator must be on duty during the absence.

      The relief coordinator must also meet the coordinator requirements.

  • Coordinator absences
    • The Ministry will fund up to five discretionary situations at the quality funding rate, per funding period, when a coordinator is not available if:

      • the service size specified by the service’s quality rate option was not exceeded and
      • the record keeping requirements described in this section are kept.

      The standard funding rate will apply from the date of the sixth absence.

      Services may apply to return to quality level funding at any time using the EC11 Form.

  • Educator absences
    • When an educator is not available (for example, due to illness), funding cannot be claimed if no care is provided. If there is a replacement educator, funding can be claimed only for the educator who provided alternative care. Funding cannot be claimed:

      • for the educator who was not available
      • if the parent/guardian chooses not to place their child in the care of the alternative caregiver/educator.
  • When to change funding rates
    • Use the following table to find out when and how to change a home-based ECE service’s funding rate:

      If the service provider... and ..then...using ...
      is funded at the standard rate the service can meet the requirements of one of the quality rate options you may apply to change to the quality funding rate the EC11 Form.
      is funded at the quality rate the service can no longer meet the quality rate requirements you must apply to return to the standard funding rate the EC11 Form
      is funded at the quality rate there has been a change in coordinator, but the service continues to meet one of the quality rate options you must inform the Ministry of Education regional office of the change the EC11/A Form

      Note: Funding rate changes are effective from the date the EC11 Form, with evidence of the educator’s qualification attached, is received by the Ministry.

  • Christmas coverage: options for all services
    • There are three service delivery options for home-based ECE services during the Christmas period.

      The options are identified in the table below.

      OptionDescription
      1 Service closes over the Christmas period.
      2 Service continues to operate as normally organised over the Christmas period.
      3 Local services can be ‘reconstituted’ to make up a single service for up to two weeks if:
      • all parents, educators, and coordinators associated with the affected services are given two weeks notice of the change taking place
      • the requirements of the Education (Early Childhood Services) Regulations 2008 are still met by the service
      • the total number of children in the reconstituted service does not exceed the maximum service size of 80
      • trained and named coordinators are on duty for all hours children are receiving education and care
      • all parents and educators that will be associated with the reconstituted service are provided with accurate contact information for the rostered coordinators at least two weeks before the service starts operating
      • clear records are kept that include:
        • the names of rostered coordinators
        • the actual times and dates each coordinator worked
        • names of educators and the children for whom they provided education and care
        • the actual dates and times that each child was cared for over the period that the service was reconstituted.
  • Record keeping
    • All home-based ECE services must keep records for audit purposes and in a place where they can be easily accessed by the coordinator.

      The relevant records must be provided at the site of the audit when an audit is taking place.

      Services not able to supply records to the Ministry’s Resourcing Auditors in support of funding at the quality rate will be returned to the standard funding rate.

      For information regarding what records your service needs to keep see Chapter 11 of this Handbook.

  • More record keeping information
    • Use the following table if you would like further information about record keeping and financial reporting requirements:

      If you would like...See Section
      Information on 20 Hours ECE 4
      Record keeping requirements for 20 Hours ECE 4-4
      An overview of the record keeping requirements for all services 11-1
      Information on funding claim audits and record keeping audits 11-2
      Information or instructions for financial reporting 12