Targeted Funding for Disadvantage

Targeted Funding for Disadvantage (Targeted Funding) aims to improve early childhood education (ECE) affordability and quality for children from disadvantaged backgrounds and their families.

Funding will be targeted to early learning services me ngā kōhanga reo (early learning services) with high proportions of children from disadvantaged backgrounds.

Questions and answers

How will the Ministry identify children from disadvantaged backgrounds?

For the purpose of the funding calculation, the 20% of children attending ECE who have spent the largest portion of their life as the dependent of a beneficiary are considered to be from disadvantaged backgrounds.

How is funding calculated?

Funding is based on an estimate of the number of Funded Child Hours (FCH) children from disadvantaged backgrounds will generate in each early learning service in the coming year – these are referred to as Targeted Hours.

Who is eligible for Targeted Funding?

Licensed early learning services are eligible to receive Targeted Funding except:

  • casual education and care services
  • hospital-based services.

Certificated Playgroups are not eligible to receive Targeted Funding.

Services with less than 20% Targeted Hours as a proportion of total FCH are ineligible for funding. This recognises that services with higher proportions of children from disadvantaged backgrounds have additional challenges.

Funding is paid on an hourly basis

Similar to how Equity Funding Component A is provided, eligible early learning services will receive additional funding for each Targeted Hour.

The funding rate per Targeted Hour will be determined in December 2017 and will remain fixed unless a decision is made to change it as part of the annual Budget process.

Is funding an entitlement generated from past attendance?

No. Funding is based on an estimate of future attendance and need. It is not an entitlement generated from past attendance.

Will funding follow a forecast and wash-up cycle, similar to general ECE subsidies?

No. Funding entitlements will only be calculated once per year. Funding will not be recalculated or altered during the year based on actual attendance.

Is Targeted Funding for Disadvantage a separate funding stream?

Yes. Targeted Funding for Disadvantage is separate to other funding streams, such as Equity Funding and general ECE subsidies.

Targeted Funding for Disadvantage will show up as a separate item in funding notices.

How often will funding be re-calculated?

In December each year, starting in December 2017, the Ministry will calculate the amount of funding early learning services will receive in the coming year.

Early learning services do not need to apply to be included in this process. On 1 February each year, those entitled to funding will receive a letter with their funding entitlement for the coming year.

Any change in funding entitlement will be effective from the first working day of March. Funding is likely to fluctuate year to year due to changes in attendance.

When will funding commence?

Targeted Funding for Disadvantage officially starts on 1 January 2018.

Funding will then be paid in three instalments each year in line with the ECE operational funding cycle (March, July, and November).

The first payment will be made on 1 March 2018. As shown below, this payment will cover the six month period from 1 January to 30 June 2018. All subsequent payments will only cover a four month period.

Table 1: Payments dates and coverage

 

Payment

Payment date

Period funding is provided for 

First year of funding

1st

March payment 2018

1 January – 30 June 2018

2nd

July payment 2018

1 July – 31 October 2018

3rd

November payment 2018

1 November 2018 – 28 Feb 2019

Subsequent years 

1st

March payment 2019

1 March 2019 – 30 June 2019

2nd

July payment 2019

1 July 2019 – 31 October 2019

3rd

November payment 2019

1 November 2019 – 29 Feb 2020


Payment of funding may be delayed if early learning services have not submitted their RS7 Funding Return.

Will early learning services be told which children are from disadvantaged backgrounds?

No. To protect the privacy of individual children and avoid the risk of stigmatisation, we will not identify which children are considered to be from disadvantaged backgrounds.

The Ministry’s expectation is that early learning services use their professional judgement to identify and support children that require additional support due to their background.

What is the Targeted Funding for?

Targeted Funding must be used in ways that directly support the learning and wellbeing of children from disadvantaged backgrounds.

On 1 February 2018, the Ministry will publish Guidelines for Targeted Funding for Disadvantage. These Guidelines explain how services can use Targeted Funding and will be available on the Ministry’s website.

What information will be communicated to to early learning services?

On 1 February each year, early learning services entitled to Targeted Funding will receive a letter from the Ministry detailing their funding entitlement for the coming year.

What information is used to estimate attendance?

Our estimates of attendance for the coming year are based on the previous year’s attendance data. Early Learning Information (ELI) data and FCH data submitted in the RS7 Funding Return are used to estimate attendance.

If an early learning service does not have a full year of attendance data, we will adjust our estimates to account for this.

If a service is not connected to ELI, or has only recently connected, the Ministry will in most circumstances use information from the ECE Census.

What data needs to be submitted to the Ministry?

In December each year, the Ministry will calculate funding entitlements for the coming funding period.

To be included in this calculation, early learning services must have submitted their RS7 Funding Return for the months between June and September that year. This ensures the Ministry can accurately estimate attendance in the coming year.

Services should also ensure their ELI data is up-to-date in November each year as this data is used in the funding calculation.

How does Targeted Funding for Disadvantage relate to Equity Funding?

Targeted Funding for Disadvantage will not impact the level of Equity Funding services and ngā kōhanga reo receive.

This initiative is not replacing Equity Funding. It is intended to complement Equity Funding Component A and its objective of reducing educational disparities in New Zealand.

Are there any reporting requirements?

Each year services must report to the Ministry of Education on how they use Targeted Funding and what impact it has had on children in their service. Reporting must be completed at a license level.

The reporting template for Targeted Funding is currently being finalised. We will notify services when it is available in the He Pānui Kōhungahunga – the Early Learning Bulletin. To help complete this template, we suggest you keep a record of how you use Targeted Funding.

For early learning services that receive Targeted Funding, the reporting template needs to be completed and submitted to the Ministry by 1 February the year after they received funding.

Are there any restrictions on the use of Targeted Funding?

Yes. Targeted Funding cannot be used for general operating expenses or profit. On February 1 2018, these restrictions will be detailed in Chapter 11 of the ECE Funding Handbook.

How will the Ministry protect privacy and data security?

As part of this initiative, the Ministry has completed a Privacy Impact Assessment as per the best practice guidelines published by the Privacy Commissioner. This is available in the link below.

Service closures or suspensions

To be entitled to the full amount of Targeted Funding, early learning services must not close or be suspended during the period that Targeted Funding is provided for.

If a service closes or is suspended after receiving Targeted Funding, they will not receive any additional payments.

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