Equity Funding

The Government is committed to high-quality early childhood education (ECE) and the benefits it provides to young children before starting school.

The Government’s priority is to improve participation in quality ECE by Māori and Pasifika children, and children from lower socio-economic status backgrounds, while also controlling expenditure.

Equity Funding provides additional targeted funding to services that provide ECE for high-needs families. Services receive Equity Funding if they meet one or more components, including catering for low socio-economic communities and operating in a language other than English.

Budget 2011 has extended Equity Funding to all ECE services that provide for high-needs families. Currently only community-based ECE services are eligible for Equity Funding. This initiative extends eligibility to Equity Funding to all services meeting the same criteria.

Equity Funding supports the Government’s priority to increase participation in quality ECE.

The objectives of Equity Funding are to:

reduce educational disparities between different groups in New Zealand communities
reduce barriers to participation faced by those groups that are under-represented in early childhood services
support early childhood services to raise their level of educational achievement.

Eligibility for Equity Funding is based on the characteristics of children enrolled and funding is paid directly to ECE services or umbrella organisations. It is made up of four components:

Low socio-economic community
Special needs and non-English speaking background
Language and culture other than English
Isolation.

Services can choose how to spend Equity Funding with the equity objectives of participation and quality in mind. This can include purchasing additional resources, employing additional staff and providing professional development for staff.

Currently 1,277 services receive at least one component of Equity Funding.

Extending Equity Funding to all services

Budget 2011 is investing $21.5 million over four years to extend Equity Funding to all ECE services that provide ECE to children from high-need communities from 1 July 2011.

Through this initiative we estimate approximately 550 additional ECE services would become eligible for Equity Funding.

Questions and answers

How will I know if my service is eligible for Equity Funding and how do I apply?

The Ministry will be contacting all private ECE services to gather the addresses of children who attend the services to assign an equity index rating. This information will determine whether services are eligible for components A and B (low socio-economic community and special needs) of Equity Funding. Services will be advised of their equity index rating.

If you think your service is eligible for funding against component C (the language and culture other than English (including sign language) component), you will need to complete the EC15 Language and Culture Attestation Form. This is available on our ECE Lead website.

Eligibility for component D (isolation) will be determined by the Ministry of Education and services will be advised of the outcome.

If my application is approved, when can I expect the first payment?

ECE services will become eligible from 1 July 2011. The first payment will be made on 1 November 2011.

What kind of services or resources does Equity Funding pay for?

Equity Funding must be spent with the equity objectives for participation and quality in mind. How each service spends their Equity Funding will depend on the component(s) the service is eligible for. Suggestions for ways to spend Equity Funding are available in your EC Funding Handbook. Examples include transport, professional development, employing additional staff, and purchasing additional resources.

What are the payment rates for Equity Funding?

For component A: Low socio-economic community and component B: Special needs and non-English speaking backgrounds

Low socio-economic Rate per FCH	Special needs and non-English speaking backgrounds Rate per FCH
EQI 1 $0.42	EQI 1 $0.20
EQI 2 $0.33	EQI 2 $0.13
EQI 3 $0.18	EQI 3 $0.09
EQI 4 $0.09	EQI 4 $0.08

Note: FCH = Funded Child Hour or an hour that Government funds for a child to attend ECE.

For component C: Language and culture other than English (including sign language)

Payment under this component is not tied to the size of a service, and is paid by way of a fixed monthly grant.

Services will receive $2,116.68 per annum, or $176.39 per month for 1 November 2010 payment onwards.

For component D: Isolation

Payment under this component is not tied to the size of a service, and is paid by way of a fixed monthly grant. The grant increases to reflect higher degrees of isolation within the eligibility threshold. This means that more isolated services receive a higher rate of funding.

The payment bands are as follows:

Isolation index bands	Monthly amount
1.65 to 1.83	$99.95
1.84 to 2.53	$150.52
2.54 and greater	$290.45

Why is equity funding being extended to all services?

This initiative is about recognising the contribution that all services make to the Government’s priority groups. It may also provide incentives for establishing new ECE services in target areas and support increases in quality.

Is Equity Funding effective?

Evaluation evidence indicates that services receiving Equity Funding were more likely to be rated as good or very good compared with services which did not receive it. Services are required to report to parents and the local community about how they have spent their Equity Funding.

Need more information?

We recommend you read the detailed information on equity funding on the ECE Lead website.