20-Hours ECE: The Rules* and Your Questions
Children’s eligibility for 20 Hours ECE starts on their third birthday and ends on their last day in ECE before they start school.
Services must allow parents the choice to receive 20 Hours ECE or not.
Services must also allow parents to make the choice as to whether to receive 20 Hours ECE or receive childcare assistance from Work and Income if they are eligible for the hours of 20 Hours ECE. The only exception is if your child is in home-based ECE and the educator you are with applies their own top up payments to 20 Hours ECE funding that the Ministry pays to the agency they are working under – then WINZ may help with the cost of home-based educator top up payments.
Parents must not be charged fees for hours claimed as 20 Hours ECE.
Parents can only be charged fees for hours outside of the 20 Hours ECE maximum of 6 hours per day and 20 hours per week per child.
Rates (and changes to rates) must be documented and provided to parents/caregivers.
There is a loophole in the 20‑Hours ECE funding rules that allows services to charge parents any amount they choose for hours beyond the 20 funded hours. As a result, some services set minimum weekly attendance requirements above 20 hours and apply a flat fee, rather than clearly identifying which hours are free or allowing enrolment for 20 hours or fewer at no cost.
Optional Charges
Should your centre or home-based ECE service ask you to pay an amount on top of the 20-hour subsidy, check if it provides the following information as explained below.
Under the Ministry of Education rules for 20-Hour Funding the centre can choose to ask you to pay an ‘Optional Charge’ for:
- aspects of provision that are not required by regulation and are over and above what is needed for a licensed early childhood service to operate.
- items that parents may either provide for their own children or pay for the service to provide, such as sunhats and costs associated with going on excursions (such as hiring a bus).
Optional charges should be for and reflect the real and actual costs of the additional item or activity. The information families are provided with should show the real and actual costs of each of the additional items and activities that are included within the optional charges (e.g., the bus fare for a field trip is $4, lunches over a week are $20, or a sunhat is $8.00).
The service should inform families in writing that they will not be penalised in any way should they decline to pay the optional charges. Whether or not you pay the optional charge cannot be used as a condition of initial or continued enrolment.
Parents who have signed an agreement to pay optional charges, should be given reasonable opportunity to review their commitment to paying. Once parents have agreed to pay optional charges (check the signed enrolment form) then parents legally must pay the optional charges. The Ministry of Education requires services to give families reasonable opportunities to opt-out of their agreement to pay optional charges.
* Source: Ministry of Education, 2025.
Question 1
Dear My ECE, when my child turned 3 we were asked if we wanted to sign up for the 20-Hours ECE and told it would mean a discount, so that we would pay about $80 for 21 hours of care.
I was under the understanding that the 20 hours was fully subsidised, but the Manager told me that the Government lets the daycare decide what to do with the funding and that it can be used to offer a discount. A couple of my friends say that their daycare does the same.
My problem is that things got so awkward when I raised it the first time, that I don’t want to raise it again with the Manager. Does the Ministry of Education regularly check on daycare charging practices? Or is the scheme run on trust?
Answer
20-Hours ECE funding can be claimed by the service from the Ministry of Education for up to 6 hours per day, and up to 20 hours per week after you have signed up to the 20-Hour scheme. Go to an article on 20-hours ECE funding amounts to see how much your service is paid per hour for your child.
Because the servcie can only claim up to 6 hours per day there might be some hours above the 6 each day which cannot be put towards 20-Hours ECE and for which you are being charged $80.00. For example, if your child attends for 8 hours in a day, only 6 can be claimed for 20-Hours ECE Funding, leaving 2 hours which would be charged at the rate set by the service.
Ask for a copy of the fees structure if the centre has not given this to you. It should show the usual hourly/daily/weekly rate for children aged 3 and over who are not on 20-Hours ECE Funding and for children who are on up to 20 hours of 20-Hours ECE Funding. Compare the two and see if you are being over-charged for the additional hours you use above 6 hours daily (up to 20 hours week).
The Ministry audits ECE services to check on funding. If you believe your centre is breaking the rules then make a complaint to the Ministry of Education so it can investigate.
When the Ministry receives a complaint, it is expected to make contact with the centre and check that it is following the correct rules. In many cases, a daycare manager or administrator may not have taken time to understand the rules and may quickly make corrections when the Ministry explains the rules. The Ministry may also bring forward the audit process for the centre and do this sooner rather than later in response to information you provide to it.
Question 2
Dear My ECE, I’m feeling ripped off. My son goes to a private Kindy three days a week from 8.00am – 3pm. I am paying $60.00 a week even though we are getting 20-Hours for 6 of his 7 hours each day. I challenged the manager on being charged $20 for the extra hour per day and she said its a daily charge and ‘if you don’t like it you can leave and and good luck finding a centre that charges by the hour.’ Are kindies allowed to do this?
Answer
Early childhood services find ways to get fee revenue from children on 20-Hours ECE. This has meant that many parents cannot access genuinely free education for their child and has pushed childcare bills up higher and higher.
One way that services get away with charging fees for 20-Hours ECE is to require children to be enrolled for more than the maximum of 6 hours a day, or 20 hours a week. The Ministry of Education does not set controls on what services can charge families outside of 20-Hours ECE. From the Ministry’s perspective, its fine for a Wellington preschool that requires its parents to enrol their child in a 7-hour day. to charge parents $66.00 per 7-hour day when 6 of these hours are covered by 20-Hours ECE funding.
By setting a daily or weekly fee for children on 20-Hours ECE, and not providing an hourly fee rate services can mask their fees for 20-Hours ECE.
Fee charges for 20 Hours ECE can be disguised on invoices by bundling the free entitlement with other hours and not showing the hours claimed under 20-hours as $0.00.
Treasury warned the government in 2023 that if funding for 20-Hours ECE was increased without tightening the rules around fee charging, services may use the increase to raise profits and not pass-on new funding dollar for dollar to parents. But the government has continued to give funding increases to services and has not closed the loopholes.
In 2013 a group of parents made a complaint to the Commerce Commission and the Commission was successful in prosecuting the centre for misleading parents about 20-Hours ECE funding.
The centre told parents that it was receiving significantly lower funding than it in fact received, and parents were asked to make up the supposed shortfall between the pre-school’s hourly charge and the subsidy received.
The District Court Judge said “one obvious motivation was to maximise an unlawful financial gain” and that the centre had “undermined the purpose of the ECE programme by making its services appear more expensive than they ought to have been.”
So, what can you as a parent do if you feel you are being ripped off?
You could vote with your feet and patronize a service that offers genuinely free ECE. Services operated by not-for-profit incorporated societies tend not to set fees that may relate to 20 Hours ECE. Services in poorer areas tend not to charge families to access their child’s 20-hour entitlement because they know they cannot afford to pay.
Should you believe your service is wrongly charging or is misleading on its charges, you have the right to make a formal complaint.
Read more:
Changing 20-Hours ECE temporarily to another service
15 Responses
If charged for lunch that’s provided by the service as part of the 20 Hours ECE optional charges, then you can choose not to pay it. The service may ask you to provide food instead for your child, but it cannot and must not let your child go hungry and deny food because you haven’t agreed to pay for it as part of the optional charge.
Hi there, thanks for this info! So is it the first 20 hours get subsided? Im confused by why many daycares fee structure seems to spread the 20 hour subsidy over the week. I.e. I would have expected that the 6hr/day meant that if I was using only 20 hours I would get the maximum subsidy however I see that if my child was in daycare for 5 days the same hourly rate applies.
Hi Toni, You are correct that 20 hours is a higher subsidy intended to cover the fee and services that sign-up with the Ministry of Education to offer 20 hours ECE to their parents are not permitted to charge “fees’ for the 20 hours. If you are using your 20 hours ECE at a service and asked to pay fees the same as for hours outside of 20 hours then question your service – or make a complaint to the Ministry of Education so it can investigate and check the charging practices at the service.
If a parent is using 2 ECE services and claims their 20 hours at one service then the second service can charge, and this would ordinarily be at their same fees rate as hours outside of 20.
Hi there, I am still a bit confused about ECE costs with the 20 hours of no fees.
The ECE in question we are looking at charges $200 for 2 days (19 hours total), without the 20 hour subsidy.
However with the 20 hour subsidy the cost for 2 days only goes down to $165.
I don’t quite understand why this is still quite expensive? My understanding is that we can only get 6 free hours a day, but even then this is 12 free hours out of the total of 19 hours. Based on the original $200 bucks I would expect parents to pay only for the 7 hours remaining, or $74 (ratio of 7/19 x $200). I might be missing something very obvious here haha, can you please advise?
Same issue as James. (I apply the same math).
What are we missing?
James, Daniel, and all parents – maybe it’s time for someone to take a complaint about their early childhood service’s 20 Hours ECE free charges to the Commerce Commission and get them to investigate. https://www.myece.org.nz/opinion-20-hours-ece-changes/
Can a daycare charge more than their opening hours? Daycare open from 8am to 4pm but charge us 9.75hours a day because they charge as a long day section?
So its open for 8 hours but charges for 9.75 hours? That’s weird. Have you complained? What did they say? Could it be that they charge a levy (an extra fee) on top of the fee for children that stay all day and don’t go home at lunch-time?
My son attends an ECE for 4 hours twice a week, (8 hrs per week total) they are now charging an additional $25 per day (equates to $6.25 per hour) to top up because they say the ECE funding amount does not cover their costs.
Is this correct as just a 20 hours subsidy or are the first 6 hrs per day / 20hrs week meant to be free?
My sons been doing 19.5 hours a week since the start of the year I asked about subsidy she said I didn’t qualify for it my sons 3 and a half and now I’ve bumped it up an hour to see if I can now because it’s over the 20 hours she’s still saying no I’m so confused cos it’s 30$ a day and for the extra hour I added Ive been charged an extra $10
If your son’s ECE service is one that is eligible for 20 Hours ECE funding (and nearly every service has signed up for this) then you should have been given the first 6 hours a day (up to a max of 20 hours a week) with no fees (although there can be optional charges). Report and make a complaint to the Ministry of Education office in your local region if you were not. Any hours above this the service can charge what it likes.
Kia ora,
The centre my daughter attends has sent out a fees guideline which has the 20 hour free ECE funding on it . However a day will only drop down to $71 from the $96 it is currently (she is not quite 3). I was under the impression that because she attends three days a week for 7 hour day fee (total of 21 hours) I would only have to pay for the additional three hours that the six hours a day wouldn’t cover. Is that not the case? If not, how does the funding work?
Same situation as everyone else my son goes for 3 x 4 hours ( morning sessions) and we pay 160 a week. When he turns 3 they said it goes down to $72 a week. That means they are only getting $7.3 an hour from the govt. I couldn’t find a pay parity to match this. How can that be when the 4 hours should be fully funded? The math does not work.
Same here. Full day is $88 8.30-5.30pm. It Changes to $77 per day with ECE funding.
Thats not much of a saving?
My three year old attended four days a week at his centre and we were paying $224 per week. Before he turned three we paid $316. He was enrolled for 4 days a week and full hours each day. The centre is open 7.30—6pm so I calculated based on those hours although we usually pick up by 4.30. So why is the difference between a 4 day week and a 5 day week only $11 and why are we getting only $92 saving compared to without the subsidy when the 20 hours would be $106.66?
Breaking the 20 hours into the structure of three days of six hours and one day of two hours
Mon – 6hrs free = $31.98
Tues – n/a
Wed – 6hrs free = $31.98
Thurs – 6hrs free = $31.98
Fri – 2hrs free = $10.66
I had expected the savings from the 20 hours subsidy to make more of a difference and being on parental leave we just couldn’t afford it. I enquired with the centre about it and also the ministry ECE help desk and it was too difficult to get the centre manager to see reason, she just said they get audited by ero like every centre and that it was standard practice. We moved our son to a local kindy where he does 3 days, 8.30 til 2.30 and it’s fully covered by the government funding. If we do 5 days I believe it will cost us $80. The discrepancy between these systems is so bizarre and I’m just grateful that I’m on leave and can manage the reduced hours – if I was working we wouldn’t be able to access kindergarten. Extra grateful because my son is happier there too! Feels like a better service for less cost!?