An Overview of Child Care Costs and Government Funding

Published on Tuesday, 26 September 2017
Last updated on Monday, 29 March 2021

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Although it has priceless benefits for youngsters, early childhood education and care does come at a real cost for families. 

Here, we consider the fees associated with early childhood education (ECE) services and kōhanga reo, and look at how the government helps families pay for early learning and child care.

How much does early childhood education and care cost?

The cost of early learning and care varies between services and families. 

While Te Kura’s distance education programme is free for ages two to six, other ECE services will charge an hourly rate or ask parents to pay by the term. Kōhanga reo have a whānau contribution system, which means that whānau may pay fees and/or contribute koha (gifts), depending on their circumstances. 

The cost of attending an ECE service or kōhanga reo is also affected by:

  • How much time your child spends there
  • The facilities or services being offered
  • How many adults are employed to educate and care for children
  • Their qualifications 
  • Whether 20 Hours ECE or a Childcare Subsidy applies

There may be waiting list fees, and ECE services and kōhanga reo are also allowed to ask families to make a donation or pay optional charges to cover the actual cost of providing extra items or services. These are paid at your discretion.

To find out what your family needs to pay, speak to your ECE service or kōhanga reo directly. This is also a good chance to ask about things like payment systems, minimum enrolment times and whether fees apply when your child is sick or on holiday. 

How does the government help families with child care costs?

Fortunately, the government recognises the importance of early childhood education and care in the years leading up to school age, and provides financial assistance in a number of ways:

  • 20 Hours ECE is a subsidy that applies to all preschoolers aged three, four or five who attend ECE. If your child attends an ECE service or kōhanga reo that offers 20 Hours ECE, the government will pay for up to six hours a day and up to 20 hours a week of education and care, regardless of your family income. 
  • Childcare Subsidy is a payment that helps eligible families with the cost of pre-school child care. It is normally paid for up to nine hours of child care per week (for those not working, studying or training), but some families may receive it for up to 50 hours a week. 
  • The Out of School Care and Recreation (OSCAR) Subsidy assists families with school-aged children and subsidises the cost of before school and after school care for up to 20 hours a week, and school holiday programmes for up to 50 hours a week.
  • Flexible Childcare Assistance helps sole parents pay for out of hours child care. If the parent is working when child care programmes are closed (e.g. weekends or nights), this weekly payment helps pay for child care provided by a family member, friend, neighbour or child-minder. 
  • The Guaranteed Childcare Assistance Payment helps teen parents pay for their under five’s child care while they’re in full-time education, training or work-based learning.
  • And the Early Learning Payment helps pay ECE costs for young children (aged 18 months to three years) whose families are enrolled in certain Family Start or Early Start Programmes.  

What other financial support is available to families?

As well as easing child care costs with the above subsidies, the government also supports families by bolstering the weekly budget, giving parents time to bond with their baby and helping with day-to-day expenses: 

  • Working for Families Tax Credits come in four types and help with the cost of raising a family, whether they’re working (in-work tax credit), earning a low income (minimum family tax credit), looking after a dependent child (family tax credit) or caring for a baby or toddler (Best Start).
  • The Paid Parental Leave system allows mums, dads and primary carers to take time out from work to focus on their baby or under six child. 
  • The Accommodation Supplement eases housing costs for some families, by helping with rent, board or home-ownership. 
  • The government may assist those on low incomes or benefits with school-related costs (i.e. uniforms, stationery, fees and activities) and other living expenses
  • Sole Parent Support is a weekly payment that helps single parents find part-time work or prepare for work.
  • And, last but not least, the government can assist with Child Support assessments and payments to ensure that child-raising costs are properly met when parents separate.

In summary, child care costs do impact the family budget, but the government recognises the life-long value of quality ECE and it makes child care more affordable with a number of family-focused subsidies. 

It’s definitely worth reading more about each of the payments above, and if you think you might be eligible for them, then make sure you apply for the subsidies and reap the rewards – both in dollar terms and in the gains your child will receive by attending ECE. 

Ministry of Education
Education Review Office
Work and Income
Inland Revenue


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