Key Funding Changes for Early Childhood Education in New Zealand

The Ministry of Education in New Zealand has introduced some major changes that affect early learning services. These updates will shape how centres manage salaries and funding over the next two years. The focus is on teacher pay, funding flexibility, and a pause in upgrading to higher funding rates. Services that are already part of the pay parity model need to understand these shifts, as they could influence budget planning and staffing decisions through 2027.

More Control Over Starting Pay for New Teachers

From 1 July 2025, centres involved in pay parity will be able to decide where a new teacher starts on the pay scale. This applies to teachers who have just received their certification or are working in the New Zealand ECE sector for the first time. Until now, services had to consider experience, qualifications, and time already spent in the field. That is no longer required for the first placement on the pay scale.

During this two-year period, these new hires must still receive at least the minimum rate. However, employers are no longer required to assign higher steps based on background. Teachers will still move up the scale over time, but the starting level is now flexible. This gives providers some room to manage costs while still following minimum pay requirements.

Funding Upgrade Freeze, No Changes Until Mid-2027

Another important update is the freeze on moving up to higher funding bands. Once a service chooses a pay parity level, Parity, Extended Parity, or Full Parity, it cannot move to a higher one until after June 2027. This change is meant to keep funding stable while the Ministry studies the effects of the new hiring rule.

Only two exceptions apply. New services or those currently not using any parity option may still enter the scheme. Also, any service that drops out completely for a period may rejoin, but cannot climb to a higher level until after the freeze ends.

For services already in the system, this means that decisions made now will shape funding for the next two years. Providers must assess their current position and decide whether to maintain, step down, or, if eligible, upgrade one final time before the freeze starts.

Important Deadlines to Change Pay Parity Level

The Ministry has confirmed a final chance for centres to increase their funding level before the two-year freeze. Any provider that wants to move to a higher parity band must act during the July 2025 funding process. This opportunity closes after that funding cycle, and the selected rate will be locked until 2027.

To do this, services must:

• Ask the Ministry for the EC20a form by 9 June 2025

• Send the completed form back no later than 13 June 2025

• Begin paying teachers at the new salary rate from 1 June 2025

• Make sure changes match the terms set out in the teacher contracts

These dates are firm. Any centre planning to switch must stay on top of them to avoid missing out. After this point, higher funding cannot be requested until the freeze ends.

A Two-Year Window for Adjustment

In short, centres working within the pay parity model have a short window to make adjustments. While more flexibility is now allowed for setting salaries for new teachers, services will be unable to shift to higher funding bands for two years starting July 2025.

If a centre wants to move to a better rate, the time to act is now. All other changes will be paused until 2027. This shift gives providers more control in one area while limiting movement in another. Understanding both sides of the update is important for staying compliant and planning ahead.