Financing for equity in pre-primary education
1. Education resources to subnational governments
2. Education resources to institutions
3. Education resources to students and families
4. Social policies and family support programmes
Introduction
Key financing indicators (UIS Data)
The official entrance age to pre-primary education is three. Two years of free pre-primary education are granted in legal frameworks. Compulsory pre-primary education is not granted in legal frameworks. The net enrolment rate for pre-primary for both sexes was 82.29 in 2023.
Governance
The Ministry of Education is the primary government ministry responsible for financing, allocating, and overseeing pre-primary education budgets in New Zealand.
Tuition-free status
Two years of free pre-primary education are granted in legal frameworks.
1. Education resources to subnational governments
Pre-primary education funding is allocated through Vote Education, which is administered by the Minister of Education in accordance with the ECE Funding Handbook, issued under section 548(5) of the Education and Training Act 2020. Funding is centralised, with most ECE funding flowing directly from the Ministry of Education to individual service providers. More information is provided in the following section of this profile.
2. Education resources to institutions
There are multiple types of government funding for pre-primary institutions, outlined in the ECE Funding Handbook: the primary subsidies are the ECE Funding Subsidy, 20 Hours ECE, Equity Funding, and Targeted Funding for Disadvantage (TFFD). There are also a number of discrete funds targeting specific objectives.
The ECE Funding Subsidy is the primary government funding mechanism for licensed early childhood education services. It helps cover operating costs by subsidizing a portion of the cost for each hour a child attends ECE, up to 6 hours per day and 30 hours per week per child-place. Funding rates are calculated per enrolled child and are based on the child’s age, the service type (teacher-led vs. parent-led), and quality indicators. Detailed information is provided in Chapter 3 of the ECE funding handbook.
20 Hours ECE is a higher rate of funding than the ECE Funding Subsidy and is designed to support the provision of 20 hours of ECE for three-year-olds, four-year-olds and five-year-olds for up to a maximum of six hours per child per day and 20 hours per week. More information is provided in the following section of this profile.
Equity Funding provides additional educational resources to targeted communities to help improve access to early childhood education. Equity funding aims to reduce educational disparities between different groups communities and to reduce barriers to participation faced by those groups that are underrepresented in ECE services. Equity funding targets low-socioeconomic communities; individuals with special needs and non-English-speaking backgrounds; individuals from language and cultural contexts other than English; and isolation.
Targeted Funding for Disadvantage (TFFD) is an additional funding stream provided by the Ministry of Education to licensed early childhood education (ECE) services and ngā kōhanga reo. It is designed to support children who are identified as being at greater risk of educational underachievement due to socioeconomic disadvantage. TFFD is paid on top of core ECE funding streams such as the ECE Funding Subsidy, 20 Hours ECE, and Equity Funding.
3. Education resources to students and families
The Ministry of Education’s 20 Hours ECE programme entitles all children aged 2 to 5 years to 20 hours of fully funded early childhood education per week. Funding follows the child to their chosen licensed provider, with the subsidy being paid directly to ECE services. Services that opt into the 20 Hours scheme are prohibited from charging fees for those hours. For hours beyond the 20-hour entitlement, the government provides an ECE Funding Subsidy covering up to 30 hours per week of education and care per enrolled child, with differentiated per-hour rates based on child age, service type, and quality indicators. The ECE Funding Handbook provides detailed information on eligibility criteria for 20 Hours ECE and the ECE subsidy.
4. Social policies and family support programmes
The Childcare Subsidy is a financial support mechanism administered by Work and Income designed to assist families with the cost of pre-school childcare. Eligibility is income-tested and limited to principal caregivers who are New Zealand citizens or permanent residents. Eligible children include those under age 5, children over age 5 enrolled in cohort-entry schools, or children under age 6 receiving a Child Disability Allowance. The child must attend an approved early childhood education (ECE) programme for a minimum of three hours per week.
Inland revenue also provides support with the costs of ECE through FamilyBoost. FamilyBoost is a childcare payment to help eligible households pay for the cost of early childhood education (ECE). It provides eligible families with a refund on a portion of their ECE fees, families register and claim through the myIR website by uploading their ECE invoices each quarter.
This profile was reviewed by Isabel Warden, Policy Analyst, and Alasdair Saunders, Principal Policy Analyst, of the Ministry of Education of New Zealand.
