Education Funding System Review

We're taking a number of initial proposed changes to the education funding system, for ECE services, ngā kohanga reo and schooling, to more detailed design and testing.

The Review is part of the Government’s Education Work Programme for building a sustainable, fit for purpose education system that enables all young New Zealanders to achieve educational success. There is a lot more work to do before final decisions are made on which, if any, of the proposals are implemented.

Risk Index to replace decile funding

On 31 July 2017, The Minister of Education, Nikki Kaye confirmed that the Government will replace the decile system for schools and the equity index for early childhood education services and ngā kōhanga reo, used to allocate funding to mitigate the impact of disadvantage, with a new and improved funding system.

The new system will be based on a Risk of Not Achieving Index that will better target funding to need. The change will occur in 2019 or 2020, depending on the outcome of further consultation with the education sector.

The Government has not yet taken decisions on the funding arrangements to support the new Index, but plans to make additional funding available to support the new system. It has also agreed that no school, early learning service or ngā kohanga reo will see a reduction in its disadvantage funding as a result of the replacement of decile or the equity index.

Schools and services will be funded based on their estimated number of children at greater risk of educational underachievement using the new Risk Index. The factors that will make up the index will be finalised in the next stage of work. Those that are likely to be included are:

  • Proportion of time the child has been supported by benefits since birth
  • Child has a Child, Youth and Family notification
  • Mother’s age at child’s birth 
  • Father’s offending and sentence history
  • Ethnicity
  • Youth Justice referral 
  • Mother’s and father’s average earned income over previous 5 years 
  • School transience.

The Index will operate within the Integrated Data Infrastructure hosted by Statistics New Zealand. The Ministry, schools and services will not be told the names of children who generate the targeted funding.

Schools and services will decide how best to use the additional funding to support the children they assess to be at risk of underachievement based on what they see in the classroom.

The shift to a Risk Index for disadvantage funding is the first change to education funding to come from the Funding Review.

For more information go to:

Next steps

The decisions taken to date are the first steps in replacing the decile/EQI system. Work is underway to inform final decisions on:

  • the proportion of children that are defined as disadvantaged for funding purposes
  • the design of new funding mechanism (funding rates and thresholds that recognise higher concentrations of disadvantaged children in schools and services) 
  • the system-wide level of funding to mitigate disadvantage in early childhood education, ngā kōhanga reo, and schooling
  • whether it is possible to implement the new funding arrangement for the school sector in the 2019 school year
  • additional funding to support the implementation of a new funding model.

Further work is also being progressed on the implications of the replacement of decile/EQI for targeting other funding for schools and services, including by other agencies.

The Ministry of Education also continuing to progress work on other elements of the Funding Review:

  • the curriculum per-child funding amount for state and state integrated schools
  • the learning support allocation
  • supplementary funding for small and/or isolated state and state integrated schools and for isolated services
  • the overall funding review proposals.

This work will continue to be progressed in discussion with the Ministerial Advisory Group and the Technical Reference Groups.

Ministerial Advisory Group

The original Advisory Group has been re-convened as a Ministerial Advisory Group. It brings together representatives from the same stakeholder groups across early childhood education (ECE) and ngā kōhanga reo and schooling. Go to the list of Ministerial Advisory Group members.

Technical Reference Groups

A number of topic specific Technical Reference Groups, made up of education and sector experts have been advising on the detailed design and policy development. Go to the list of technical reference groups and members.

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