Childcare Fees and Costs for Parents of Using an Early Childhood Service

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Childcare fees and hidden charges.

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Until recently there has been some quite aggressive marketing by early childhood services.  Services were offering specials like “the first two months at 50% fees”.  If you ask and if the service knows you are shopping around, you may or may not be lucky to be offered a discount or special offer – if this available but the service is just not advertising it. Some Kindergarten Association allow 2-year-olds to attend and pay the same charges as the 3 – 5-year-olds children receiving 20 Hours funding. But again, you need to ask as this is not usually advertised.

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There is an oversupply of services in many areas of NZ and the government is continuing to support even more services to open and existing services to increase their size. However, from early 2023 ‘Network Management’ is coming in whereby service providers will need to prove to the Ministry of Education that a new service is needed in the area in which it is to be located.

In areas where there are many services and services have spare capacity, services are more willing to negotiate prices, or hours, or provide a special ‘deal’. 

A rough guide to childcare fees and charges

All services can charge what they want. The government does not set early childhood education fees. Services in higher socio-economic areas tend to charge higher fees, reflecting possibly higher lease costs and reflecting what they know parents are willing to pay and can afford. Back in the day Kindergarten Associations could not charge fees, but regulations were changed to allow fees to be charged.

Home-based education fees vary between agencies and can be as little as $4 an hour and up to $10 or more. Some agencies set a standard fee for children under all its educators and nannies, while others let individual nannies and educators decide what they will charge parents.

Playcentres are known to be the most affordable early childhood service – some centres request a donation or small fee per term – on average $30 per term. If you are eligible for a WINZ childcare subsidy you could well pay nothing.  

Kindergarten Associations currently receive a higher public subsidy per hour per child under 20 Hours and 30 Hours funding schemes compared with all other ECE services. The higher funding, and the fact that kindergartens are not-for-profit organisations can see parents asked to pay no more than around $2.50 to $3.00 per hour for any hours of care above 20-Hours.  However, some kindergarten associations may charge more – $5 – $7 an hour – for children that attend over 20 hours or over 30 hours.

At other ECE centres the hourly charge for children not receiving 20-Hours ECE funding is usually around $4.50 to $7.00 an hour. Fee rates for under-two-year-olds are usually at the higher end because services are required to have at least 1 adult to every 5 children under 2 years compared to a minimum of 1 adult to 10 children over 2 years. The staffing ratios for 2-year-olds is the same as for 3- and 4-year-olds.

A childcare subsidy is available depending upon the level of family income to help cover the childcare fees. The WINZ Childcare Subsidy can help to partially or fully cover fees up to 9 hours a week where the parent/ caregiver is not working and extends up to 50 hours a week where the parent/caregiver is working or in training.

The subsidy is only available for children up to 5 years of age (or 6 years if your child receives a Child Disability Allowance) who attend a licensed early childhood programme for 3 or more hours a week. But it may be extended beyond the 5th birthday if the school has advised that it will not allow the child to start until the beginning of the term straight after the 5th birthday.  

Other charges in addition to the childcare fees

Parents can be caught out by additional charges and not factor these in when choosing an early childhood service. So, it’s a good idea to ask and clarify what extra charges there might be before enrolment. 

  • some services require parents to pay for hours they do not use or don’t need including statutory holidays, absences, and when the service may have a forced shut down due to something like a prolonged power cut or to contain the spread of an infectious disease (e.g. measles).
  • some services may charge a levy in lieu of fundraising and add a charge for compulsory membership to associations the service belongs to. 
  • services may ask parents to provide or pay for things like tissue boxes, outings and excursions, lunches and snacks, nappy washing etc. 
  • some services charge an enrolment fee which may not be refundable if parents change their mind.  

Indirect costs families can experience

Apart from fees, there may travel costs if the service is not at your own work or home – and possibly parking charges too!

A significant cost for many parents especially during the first year of care is the cost of sickness, medical bills, prescriptions, and staying at home and taking time off from work. When children get sick, adults often do too.  

Other costs may include buying a lunch-box and drink bottle and school bag, clothing and sunhats as might be stipulated by the service. 

When parents donate their time – this can cost in lost wages and in lost time that could be spent doing other things. Voluntary contributions may include mowing the lawn, taking the aprons home to wash, participating in and organising fund-raisers, participating in parent committees or giving time in consultation meetings or filling out questionnaires.

This doesn’t happen so much nowadays – but you may be asked to provide extra bits of money for whatever might be organised by the service e.g., gold coin charges for dress-up days, raffle tickets, paying a charge for visiting artists or shows the children may be taken to.

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