Licensed home-based early childhood education (ECE) services provide education and care for up to 4 children under the age of 6 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 rates

There are 2 funding rates for home-based ECE services:

• Standard rate – this is the funding rate applicable for licensed home-based ECE services. These services must meet the requirements of the Education (Early Childhood Services) Regulations 2008.
• Quality rate – a higher funding rate is available to services that meet requirements additional to those specified in the Education (Early Childhood Services) Regulations 2008.

Education (Early Childhood Services) Regulations 2008 – New Zealand Legislation

For more information on the Regulations see:

New Zealand Legislation

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.

Section 6-4

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

‘Own’ children do not include children who are placed with the educator as part of an Oranga Tamariki care arrangement, where the Chief Executive Officer of Oranga Tamariki is their legal guardian, and where Oranga Tamariki have referred the children and/or educator to a home-based service provider.¹

¹ For audit purposes service providers must retain a copy of the referral letter from Oranga Tamariki to show that the care arrangement has been approved and that funding can be claimed.

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.

Appendix 2

Coordinator requirements: All services

Coordinators are required to comply with the rules in the Education (Early Childhood Services) Regulations 2008, including regulations 3,28(2), 44(1)(d), 62 and Schedule 1A.

Each home-based ECE service must have its own named coordinator or coordinators.

All coordinators must be ECE qualified and certificated teachers.

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.

Note: Where an educator is not able to provide education and care due to a non-controllable health and safety issue stemming from an infectious illness, home-based services can apply to their local Ministry office for emergency closure approval to use absence funding. This only applies to the educator, not other residents in their household. If approved, then normal absence funding rules apply.

Chapter 7-5 Emergency Closure

Qualification requirements: All services

From January 2021, the qualification requirements for educators on a quality funded licence changed.

From 1 June 2022 a percentage of educators in every licensed home-based education and care service must hold a recognised ‘home-based service qualification’ as set out in the Education (Early Childhood Services) Amendment Regulations 2008.

Education (Early Childhood Services) Amendment Regulations 2008 – New Zealand Legislation

The percentage of educators required to hold a ‘home based service qualification’ differ between quality and standard funded licences. See later in this chapter for more details.

For educators, a home-based service qualification is:

• (i) an early childhood education qualification that is—
  • (A) at level 4 or above on the Qualifications Framework; or
  • (B) recognised by the Teaching Council of Aotearoa New Zealand for registration purposes:
• (ii) an early childhood education qualification at level 3 on the Qualifications Framework, completed prior to 1 June 2022:
• (iii) a qualification developed by Te Kōhanga Reo National Trust Board at level 5 or above on the Qualifications Framework:
• (iv) a primary teaching qualification that is—
  • (A) listed in the Qualifications Framework; or
  • (B) recognised by the Teaching Council of Aotearoa New Zealand for registration purposes: or
• (v) an early childhood education qualification obtained overseas but recognised by NZQA as comparable to a qualification described in subparagraphs (i) and (ii).

Calculating the percentage qualification requirements

From 1 January 2024.

For standard-funded licences:

• 60% of educators in a standard funded licence must hold a home-based service qualification.
• There are no qualification requirements for the remaining educators.

For quality-funded licences:

• 80% of educators in a quality funded licence must hold a required qualification.
• Up to 20% can either be in induction (first 6 months on the quality licence) or enrolled in training (up to a further 2 years, or 4 years if they are working towards an ECE teaching qualification at Level 7 or above).

The count of educators for the percentage qualification requirement is a headcount of those working in your service. It is done on a licence-by-licence basis. In order to be counted, an educator must have provided home-based education and care for children enrolled in the licence for at least four days in a calendar month.

Each month, educators can only count towards the percentage qualification requirement in 1 licence of a service provider. For example, if you’re moving an educator from a standard-funded licence to a quality-funded licence you are unable to count the educator on both licences in the same month.

Note that this restriction only relates to this particular requirement. You can still claim funding subsidies on both licences for the children attending with those educators, subject to the usual funding rules, even if an educator changes licences or service providers in a month.

When calculating the number of educators, you need to meet the required percentage, if it works out to be a fraction, use normal rounding rules. That means, if the number of educators is 0.5 or above, you round up to the nearest whole number. If the number of educators is below 0.5, you round down.

Educators who gain a qualification during the month will be considered qualified from the date of the official notification that they have met the course requirements.

For the purposes of assessing a new probationary licence application with a request to begin at the quality funding rate, all educators who are listed as intending to work for the service will be counted towards the percentage qualification requirements.

Discretionary situations for percentage qualification requirements

From 1 June 2022.

Discretionary situations are no longer available in relation to the percentage qualification requirements.

If you do not meet the requirements in a given month, you should use the EC11HB form to apply to move back to standard funding. A service must remain on standard funding for at least 1 month before applying to return to the quality rate.

Percentage qualification requirements: Record keeping for all home-based services

From 1 June 2022.

As percentage qualification requirements are now regulated for all home-based services, the record keeping requirements around educators and their qualifications apply to both standard and quality-funded licences.

Evidence of educator qualifications

Certified copies of qualifications are required. These can be certified by:

• The service's ECE professional leader, (ie, the coordinator).
• Ministry of Education staff.
• The authority that originally issued the document.
• A Justice of the Peace.
• A solicitor.
• A notary public.
• A registrar.

For teaching qualifications where the specialisation is not identified on the certificate itself (that is, it does not state an early childhood or primary specialty), academic transcripts or similar to show the course content must be kept as evidence that the qualification meets the requirements for home-based education.

Evidence of name change or use of an alternative name must be retained, where qualifications are in an alternative name (eg, maiden name).

Evidence of meeting percentage qualification requirements

All services must keep a Master Staff Record that shows:

• all educators along with their highest relevant qualification and the date this was achieved
• entry and exit dates for all educators.

Percentage qualification requirements: Record keeping for standard funded services

From 1 June 2022.

Standard funded services must keep a monthly record that clearly shows whether the service is meeting the percentage qualification requirements.

This document should show educators and their categorisation as qualified (holding a home-based service qualification) or unqualified, and the number of days they have worked each month.

Standard-funded services can choose to categorise educators further, to match the requirements for quality funded licences. See the next section for this detail.

This more detailed categorisation is not mandatory but will be useful to determine whether the service might be eligible to apply for quality funding. Note that the limits on the amount of time an educator may be in the ‘unqualified – induction’ and ‘unqualified – in training’ categories are not applicable to standard-funded services until 2025.

Where there has been a change in categorisation from the previous month, such as an educator achieving a qualification, the reason should be indicated on the monthly record.

Monthly records must be verified by a representative of the service provider.

All services must keep educator timesheets (attendance records) that are signed and dated by the educator.

Percentage qualification requirements: Additional record keeping for quality funded services

From 1 June 2022.

There are additional records required for quality-funded services.

During the transition period, transcripts to show completed credits must be kept, if educators on quality-funded licences are being counted as having ‘5 or more credits towards a required qualification’.

For educators in study, a record of enrolment in a required qualification must be kept by the service provider. This must clearly show the date the programme commenced. This information must be included on the Master Staff Record.

Quality funded services must keep a monthly staff record that shows the educators in the licence and their categorisation as either:

Where there has been a change in categorisation from the previous month, such as an educator achieving a qualification, the reason should be indicated on the monthly record.

The monthly record should clearly show whether the service is meeting the percentage qualification requirements.

Monthly records must be verified by a representative of the service provider.

All services must keep educator timesheets (attendance records) that are signed and dated by the educator.

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.

Upcoming changes to quality rate requirements: Percentage qualification requirements

The percentage qualification requirements for the quality funding rate will change each year until 1 January 2025 when there will only be 1 funding rate for home-based education and care.

The table below outlines the scheduled changes.

^ Educators who do not yet have credits towards a required qualification.

Educators who join a quality funded licence without a completed qualification can only remain in induction for a maximum of 6 months or enrolled in training up to a maximum of 2 years, or up to 4 years if they are working towards an ECE teaching qualification at Level 7 or above.

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.

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.

‘On call’ means the coordinator can respond instantly to educators and parents in person or by phone.

Coordinator absences

The Ministry will fund up to 5 discretionary situations at the quality funding rate, per funding period, when a coordinator that meets all of the quality rate coordinator requirements is not available.

The regulations require home-based services to have a coordinator available to support educators for all hours children are attending. Discretionary situations cannot be used to avoid this obligation.

Discretionary situations are most likely to apply when a coordinator is not able to meet the full 8.30am-4.30pm on duty or on call conditions.

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

Services may apply to return to quality level funding after 1 month, using the EC11HB Form.

Christmas coverage: Options for all services

There are 3 service delivery options for home-based ECE services during the Christmas period.

The options are identified below.

Option 1

Service closes over the Christmas period.

Option 2

Service continues to operate as normally organised over the Christmas period.

Option 3

Local services can be ‘reconstituted’ to make up a single service for up to 2 weeks if:

• all parents, educators, and coordinators associated with the affected services are given 2-week 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.

Previous quality rate requirements

The following sections outline the quality rate requirements in place from 1 January 2021 until 31 December 2023. They will remain here for information purposes until the next phase of transition on 1 January 2025. Services may still be audited on periods covered by these requirements so should ensure they have compiled at all relevant times.

Previous rate requirements: Calculating the percentage qualification requirements

From 1 January 2023

For standard-funded licences:

• 30% of educators in a standard funded licence must hold a home-based service qualification.
• There are no qualification requirements for the remaining educators.

For quality-funded licences:

• 70% of educators in a quality funded licence must hold a required qualification.
• Up to 20% can either be in induction (first 6 months on the quality licence) or enrolled in training (up to a further 2 years, or 4 years if they are working towards an ECE teaching qualification at Level 7 or above).
• The remaining educators on the licence must hold at least 5 credits towards a required qualification at Level 4 or above. This category enables a transition period for educators who were already working on a quality funded licence prior to these changes coming in.

The count of educators for the percentage qualification requirement is a headcount of those working in your service. It is done on a licence-by-licence basis. In order to be counted, an educator must have provided home-based education and care for children enrolled in the licence for at least four days in a calendar month.

Each month, educators can only count towards the percentage qualification requirement in one licence of a service provider. For example, if you’re moving an educator from a standard-funded licence to a quality-funded licence you are unable to count the educator on both licences in the same month.

Note that this restriction only relates to this particular requirement. You can still claim funding subsidies on both licences for the children attending with those educators, subject to the usual funding rules, even if an educator changes licences or service providers in a month.

When calculating the number of educators, you need to meet the required percentage, if it works out to be a fraction, use normal rounding rules. That means, if the number of educators is 0.5 or above, you round up to the nearest whole number. If the number of educators is below 0.5, you round down.

Educators who gain a qualification during the month will be considered qualified from the date of the official notification that they have met the course requirements.

For the purposes of assessing a new probationary licence application with a request to begin at the quality funding rate, all educators who are listed as intending to work for the service will be counted towards the percentage qualification requirements.

From 1 June 2022 - 31 December 2022

For standard-funded licences:

• 10% of educators in a standard funded licence must hold a home-based service qualification.
• There are no qualification requirements for the remaining educators.

For quality-funded licences:

• 50% of educators in a quality funded licence must hold a required qualification.
• Up to 20% can either be in induction (first 6 months on the quality licence) or enrolled in training (up to a further 2 years, or 4 years if they are working towards an ECE teaching qualification at Level 7 or above).
• The remaining educators on the licence must hold at least 5 credits towards a required qualification at Level 4 or above. This category enables a transition period for educators who were already working on a quality funded licence prior to these changes coming in.

The count of educators for the percentage qualification requirement is a headcount of those working in your service. It is done on a licence-by-licence basis. In order to be counted, an educator must have provided home-based education and care for children enrolled in the licence for at least four days in a calendar month.

Each month, educators can only count towards the percentage qualification requirement in one licence of a service provider. For example, if you’re moving an educator from a standard-funded licence to a quality-funded licence you are unable to count the educator on both licences in the same month.

Note that this restriction only relates to this particular requirement. You can still claim funding subsidies on both licences for the children attending with those educators, subject to the usual funding rules, even if an educator changes licences or service providers in a month.

When calculating the number of educators you need to meet the required percentage, if it works out to be a fraction, use normal rounding rules. That means, if the number of educators is 0.5 or above, you round up to the nearest whole number. If the number of educators is below 0.5, you round down.

Educators who gain a qualification during the month will be considered qualified from the date of the official notification that they have met the course requirements.

For the purposes of assessing a new probationary licence application with a request to begin at the quality funding rate, all educators who are listed as intending to work for the service will be counted towards the percentage qualification requirements.

Previous quality rate requirements: Meaning of 'active educator'

From 1 January 2021 - 31 May 2022

The percentage qualification requirements are based on a count of active educators in a licence.

An educator is considered ‘active’ in a home-based licence if they are providing regular early childhood education and care to children enrolled on that licence.

An educator may still be considered ‘active’ if they do not provide education and care for a short period of time. For example, if they are sick or on holiday, or due to an emergency event like flooding. In these situations, there must be written evidence of the reason for the break, including the expected return date, on the weekly staff record.

After a continuous break of 3 weeks, educators can no longer be counted as ‘active’ for the purposes of the percentage qualification requirements.

Educators on a current licence, who have children leave and are waiting for new children to enrol with them, may also be considered ‘active’ for a period of up to 3 weeks from the date children leave.

Inactive educators can be reclassified as ‘active’ from the scheduled start date of new children enrolled on the licence to begin receiving education and care from the educator.

For the purposes of assessing a new probationary licence application with a request to begin at the quality funding rate, all educators who are listed as intending to work for the service will be considered ‘active’. Once the probationary licence is granted, educators who do not yet have children enrolled with them must be moved to ‘inactive’ status after 3 weeks.

Previous quality rate requirements: Discretionary situations for percentage qualification requirements

From 1 January 2021 - 31 May 2022

During this first stage of the transition period, a quality-funded service can access, without requesting Ministry approval, 5 ‘discretionary situations’ (ie, 5 weeks) in a funding period where percentage qualification requirements have not been met. These must be clearly identified on the weekly records.

After this, the service must apply to move back to the standard funding rate (including in situations where the 5 weeks are not continuous) and must remain there for at least one month before they can re-apply to move back to quality.

Previous quality rate requirements: Additional record keeping for quality funded services

From January 2021 - 31 May 2022

Services must keep the following records and make them available to the Ministry on request. These are in addition to the record keeping requirements for standard funded services, and the record keeping relating to the quality rate coordinator requirements in Chapter 11.

Evidence of educator qualifications

Certified copies of qualifications are required. These can be certified by:

• The service's ECE professional leader, (ie, the coordinator).
• Ministry of Education staff.
• The authority that originally issued the document.
• A Justice of the Peace.
• A solicitor.
• A notary public.
• A registrar.

For teaching qualifications where the specialisation is not identified on the certificate itself (that is, it does not state an early childhood or primary specialty), academic transcripts or similar to show the course content must be kept as evidence that the qualification meets the requirements for home-based education.

During the transition period, transcripts to show completed credits must be kept, if educators on quality-funded licences are being counted as having ‘5 or more credits towards a required qualification’.

For educators in study, a record of enrolment in a required qualification must be kept by the service provider. This must clearly show the date the programme commenced.

Evidence of name change, or use of an alternative name must be retained, where qualifications are in an alternative name (eg, maiden name).

Evidence of meeting percentage qualification requirements

Services must keep a master staff record that shows:

• all educators along with their highest relevant qualification and the date this was achieved
• entry and exit dates for all educators
• enrolment date for educators still in study.

Services must keep a weekly staff record that shows the educators in the licence and their categorisation as either:

N/A=has left service

Where there has been a change in categorisation from the previous week, such as an educator achieving a qualification, the reason should be indicated on the weekly record. If an educator has been unavailable for an entire week, the reason for this should be noted on the record.

The weekly record should clearly show whether the service is meeting the percentage qualification requirements, or (for quality funded services) claiming the week as a discretionary situation.

Weekly records must be verified by a representative of the service provider.

Services must keep educator timesheets (attendance records) that are signed and dated by the 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:

Note: Funding rate changes are effective from the date the EC11HB form, with evidence of the educators' qualifications attached, is received by the Ministry.

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.

Chapter 11

More record keeping information

If you would like more information about record keeping and financial reporting requirements check the following sections:

Information on 20 hours ECE: Chapter 4

Record keeping requirements for 20 hours ECE: Section 4-4

An overview of the record keeping requirements for all services: Section 11-1

Information on funding claim audits and record keeping audits: Section 11-2

Information or instructions for financial reporting: Chapter 12