Pay parity for certificated teachers in education and care services

Budget 2021 provides $170 million over four years for the purpose of improving the pay of certificated teachers working in education and care services.

Education and care services are teacher-led, centre-based early childhood services and are defined separately from kindergartens for Ministry of Education funding purposes.

The initiative is intended to target those certificated teachers earning the lowest levels of pay in education and care services.

The new money will become available in two stages and be paid through increases to the subsidy rates by which the Ministry pays education and care services.

From 1 July 2021, there will be an increase to the existing rates, which will be available to education and care services attesting to paying certificated teachers at least $51,358 per annum, up from $49,862 currently. The current rules that apply to the minimum attestation process will still apply. That is, if your service chooses not to attest to paying all your certificated teachers at least $51,358 per annum from 1 July 2021, your funding will drop to the 0-24% certificated teachers band.

From 1 January 2022, subject to the passage of the Education and Training (Grants – Budget Measures) Amendment Bill, an additional set of higher premium rates will be made available. Education and care services that agree to pay, at a minimum, their certificated teachers at the first six of the eleven applicable pay steps set out in the Kindergarten Teachers, Head Teachers and Senior Teachers’ Collective Agreement 2019-2022 would be paid the new premium rates. As is currently the case, there will be different bands of rates adjusted for the proportion of child hours provided by certificated teachers.

If your service does not opt into these rates but is still paying all certificated teachers at least $51,358 per annum, your funding will continue according to the proportion of certificated teachers working with children. You would not drop to the 0-24% certificated teachers band because you do not opt into the new higher premium funding rates.

The Government has now introduced the Education and Training (Grants – Budget Measures) Amendment Bill to enable this latter part of the initiative to occur by January 2022.

Government’s unequivocal expectation is that new funding remaining after meeting any pay attestation requirements will still be allocated to improve pay for certificated teachers.

The funding continues the move towards teacher pay parity initiated by the Government in Budget 2020, when $151.1 million over four years was allocated for the purpose.

The current funding system, which uses an average cost funding approach to resource services, is not able to accurately allocate funding to meet the additional salary cost for each education and care service. This is why the initiative allows services to opt-in to premium rates. It also means that whether a teacher receives a pay adjustment is dependent on whether the employing service has opted-in.

Because of the limitations of the current funding system, the Minister referred to the need to revise the funding system to achieve the goal of pay parity in his announcement on Wednesday 12 May. The nature of the work is still to be scoped. We’ll provide more information in the coming weeks.

The Ministry will work with the sector to develop more detailed implementation guidelines for centres.

Questions and answers about the pay parity initiative

Why is there a pay gap between certificated teachers working in education and care services and their counterparts in kindergartens?

Education and care teachers and their counterparts working in kindergartens have never been paid exactly the same. However, both service types received the same funding rates until 2010 in order to allow for pay parity. The Government at the time froze the funding rates for education and care services while continuing to provide rate increases for kindergartens to pay for collective agreement costs. This appears to have exacerbated any pay gap that may have existed in 2010.

What are the new premium rates intended to be offered in January 2022?

The following table sets out the funding rates education and care services would be able to opt into.

All-day teacher-led centre-based services

$ per funded child hour (incl. GST)

Rates from 1 January 2022

  
  Under two Two and over 20 Hours ECE
100% certificated teachers $14.13 $8.29 $13.52
80-99% certificated teachers $13.54 $7.49 $12.77
50-79% certificated teachers $12.25 $6.46 $11.63
25-49% certificated teachers $9.88 $5.15 $10.22
0-24% certificated teachers $8.46 $4.28 $9.31

Sessional teacher-led centre-based services

$ per funded child hour (incl. GST)

Rates from 1 January 2022

  
  Under two Two and over 20 Hours ECE
100% certificated teachers $12.95 $6.43 $7.79
80-99% certificated teachers $12.04 $5.46 $7.02
50-79% certificated teachers $10.94 $4.88 $6.38
25-49% certificated teachers $8.91 $4.19 $5.64
0-24% certificated teachers $7.77 $3.77 $5.22

For more information visit Early Childhood Education subsidies:

Early Childhood Education subsidies

What are the pay rates that education and care services would be expected to attest to?

The pay rates services would need to attest to correspond to the first six steps of the salary scale for trained and certificated teachers in the Kindergarten Teachers, Head Teachers and Senior Teachers’ Collective Agreement 2019-2022 (KTCA).

Kindergarten Teachers, Head Teachers and Senior Teachers' Collective Agreement

These would be as follows:

Pay step Annual rate
1 $51,358
2 $53,544
3 $55,948
4 $58,133
5 $61,794
6 $65,776

How would a teacher move from one step to another?

A teacher would be able to move to the next salary step on completion of 2,080 hours of work, which is the total hours worked in a 40-hour-per-week year. The Ministry would not place performance requirements on teachers as a condition of receiving higher funding rates.

How would a teacher know which step they start on?

The pay step a teacher would be required to be paid on starting employment in a service would be determined by the qualifications they hold, their service as a trained, that is, certificated teacher, and previous relevant work experience, as set out in the KTCA.  

Won’t pay rates in the KTCA change next year though?

The current KTCA expires on 11 July 2022. Until collective bargaining for the next KTCA has been completed, we are unable to confirm whether, or by how much pay rates would change over the period of the next KTCA.

How was the $170 million funding calculated?

The Ministry used information from the annual ECE Census to estimate the number of certificated teacher FTEs in education and care services. The Ministry then used annualised current rate of pay data and experience levels for certificated teachers from the ECE Remuneration Survey 2020 to cost the gap between what teachers are currently being paid and what it would cost if they were raised to KTCA pay steps, given their experience. This included estimating funding for raising the salaries of the certificated teachers with more than six years of experience but who are currently paid below $65,776 per annum.

How is the intended increase in funding rates calculated?

The $170 million total funding required (as described above) is allocated by applying a common 2.57% increase across the various funding rate categories (under 2, 2 and over, 20 hours ECE etc). The increased rates multiplied by the expected number of child hours over the four-year Budget period equals $170 million.

Would the parity funding only apply in respect to certificated teachers?

Yes, furthermore, it would only apply in respect to ECE and primary qualified teachers who have been certificated by the Teaching Council following registration. This is consistent with the Ministry’s existing funding rules.

What is a certificated teacher?

Certificated teachers are teachers who are qualified and registered with the Teaching Council and have a current practising certificate.

What about uncertificated or unqualified teachers?

The focus of the Government’s effort in this Budget and its manifesto is on qualified and certificated teachers’ pay. We recognise that unqualified teachers bring experience and skills that many services are better off for having on their staffing roster. It is likely that recognition for this group of teachers will eventually be enabled through pay equity claims in relation to support staff.

Does it apply to certificated teachers working in home-based and kōhanga reo?

The Government’s manifesto commitment is focused on education and care services only, not on any certificated teachers in home-based care or playcentres.

A very small number of kōhanga reo operate under education and care service funding arrangements. These kōhanga reo would have the ability to opt into the higher funding rates if they wished in order to provide higher pay for staff.

Additional funding has been set aside to work with kōhanga reo to improve pay in light of the Crown’s Treaty obligations. The Crown is working collaboratively with Te Kōhanga Reo National Trust on how best to make this happen in kōhanga reo.

How does this funding compare to the $151 million put into funding rates for teacher pay last year?

The funding in Budget 2020 was a payment made in good faith with the Government’s clear expectation being that it should be spent only on improving teacher salaries, not other expenses. It was effectively a global increase targeted at any and all teachers as a first step towards pay parity. There was a single mandated requirement for education and care services to pay a higher minimum salary attestation in order to receive the highest funding rates allowed under the funding rules. Better information now available has enabled us to have a clearer picture of the total amount of funding required in order to move to pay parity over time.

How many certificated teachers will get a pay rise at 1 July 2021?

We estimate around 1,250 full-time equivalent (FTE) positions will receive a pay increase as a result of the change to the minimum salary attestation required of education and care services. We think this is likely to affect about 2,500 actual teachers, regardless of the hours they work.

It is not possible to predict how many teachers would receive a pay rise from the higher parity rates intended to come into existence on 1 January 2022. This would depend on how many services decide to opt into the rates.

Why is it being left to services to opt in rather than effectively have no choice but to agree to higher rates and higher pay steps?

The opt-in approach signalled for the parity rates intended to come into effect on 1 January 2022 is the preferred approach because the ECE funding system has limited flexibility to adjust funding depending on the level of salary paid at a service level.

This is why the Minister has agreed to look at undertaking work to consider how to better align the early learning funding system to deliver pay parity. The nature of the work is still to be scoped. We’ll provide more information in the coming weeks.

Would every certificated teacher automatically get a pay rise on 1 January 2022?

Not necessarily. Those teachers already paid higher than the sixth step on the KTCA would not receive an automatic pay rise. As we indicate above, teachers in services who decide not to opt-in to the higher funding rates would also not necessarily receive a pay rise.

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