20 Hours ECE funding rates

ECE and 20 Hours ECE Funding rates

Where a child is eligible to receive, and is attending a participating 20 Hours ECE service, the service will receive the 20 Hours ECE funding rate instead of the current early childhood education funding subsidy rate.

Background about 20 Hours ECE Rates

What are the 20 Hours ECE funding rates?

The current funding rates for 20 Hours ECE can be found in the Funding section of the Lead website.

What are the 20 Hours ECE funding rates based on?

20 Hours ECE funding rates are based on the costs faced by ECE services, rather than the fees that ECE services receive from parents. 20 Hours ECE funding rates are based on 100 percent of the average cost of ECE provision to the regulated standard.
 
How often are the funding rates updated?

All ECE funding rates, including the 20 Hours ECE funding rates, are decided by Cabinet. They are reviewed annually through the Government’s Budget process. The funding rates are usually adjusted annually at 1 July to take account of increases to the cost of ECE provision. The Ministry will continue to seek ECE services’ input through regular Operating Cost surveys and other ways such as through its Early Childhood Advisory Committee.

Why are there so many different funding rates?

The 20 Hours ECE funding rates reflect the existing ECE Funding Subsidy rate structure, and ensure that the funding system reflects the diverse ECE sector in New Zealand. There are different rates for different ECE service types, because they face varying costs.
 
What information is used to calculate the funding rates?

The rate is based on the data provided by ECE services in their Operating Cost surveys.

Examples of operating costs include educational resources, administration costs, professional services, utilities, and teachers' salaries. 20 Hours ECE rates also include funding for capital and property costs, such as rent and mortgage repayments and replacement of assets.

Why are there not regional differences in the rates?

When the operating cost information was collected, the Ministry found no evidence of consistent higher costs in any region.  The information showed that the main differences in cost were due to the type of ECE service and proportions of registered teachers – both of which are both taken into account in 20 Hours ECE funding rates.

What should ECE services with high costs do?

For some ECE services that have higher than average costs or provide additional features, the 20 Hours ECE funding rates may not cover all costs. 20 Hours ECE has been designed to be flexible so that ECE services in this situation can consider options such as introducing Optional Charges for additional items or provision over the regulated standard, or requesting donations.  This allows ECE services to continue to offer the level of provision their parents want, at the same time as offering 20 Hours ECE.

What support is available to services that are not sure how 20 Hours ECE rates will affect them?

Services should contact the Ministry of Education call centre on 0800 323 323, or call their local office, who will be able to help them.