Childcare costs can be surprisingly difficult to understand. A parent might hear about 20 Hours ECE and assume that means 20 completely free hours of childcare. Then they start comparing providers and discover there may still be fees, additional hours, optional charges or different arrangements depending on the type of care.
Home-based childcare can add another layer because the way an educator is paid can differ from a centre. So rather than starting with a weekly dollar figure, it helps to understand the main pieces that can affect what your family actually pays.
What is 20 Hours ECE?
20 Hours ECE is government funding available for eligible children aged 3, 4 and 5.
It covers up to 20 hours of early childhood education each week, with a maximum of 6 funded hours in any one day. Parents cannot be charged ordinary fees for the hours their child is enrolled to receive as 20 Hours ECE.
The funding can also apply when a child attends a licensed home-based early learning service. The funding is claimed by the licensed service rather than being paid directly to the parent or educator. So home-based childcare can qualify for 20 Hours ECE in the same way as other eligible licensed ECE services.
Why might you still have childcare costs?
This is where much of the confusion comes from.
Twenty funded hours does not necessarily mean your whole childcare arrangement will cost nothing.
For example, if your child attends for 30 hours a week, only up to 20 of those hours can be subsidised by 20 Hours ECE. Full fees may apply to the remaining hours.
There can also be optional charges for additional items or services, such as food, transport or particular activities, provided parents are clearly told that those charges are optional.
Home-based childcare has one additional feature worth understanding: in some circumstances, a home-based educator may charge a top-up payment for hours covered by 20 Hours ECE where the amount passed through to the educator by the service is lower than the educator’s normal hourly rate. There are rules around how these payments work and how much can be charged.
This is why two families both using “20 Hours ECE” can still end up with different weekly childcare costs.
What is the Childcare Subsidy?
The Work and Income Childcare Subsidy can help eligible families with the cost of approved childcare, including approved home-based care.
The amount depends on factors such as household income, family size, the number of childcare hours and the type of fee being charged. In some circumstances, support can be available for up to 50 hours a week.
For families using 20 Hours ECE, the Childcare Subsidy will generally apply to other eligible childcare hours rather than replacing the same funded hours.
There is an important exception for home-based care: Work and Income may contribute toward an eligible home-based educator top-up payment charged for the same hours as 20 Hours ECE.
Because eligibility and rates depend on your individual circumstances, it is worth checking directly with Work and Income rather than assuming you will or will not qualify.
What about FamilyBoost?
FamilyBoost is another form of childcare support, administered by Inland Revenue.
The amount you may receive depends on your household income and eligible childcare costs. Parents can check the latest eligibility requirements and payment amounts directly with Inland Revenue.
Unlike 20 Hours ECE, which is paid through the early learning service, FamilyBoost is claimed by the parent or caregiver through myIR after the relevant quarter has ended.
FamilyBoost can apply to fees from a licensed ECE provider, which can include licensed home-based childcare.
So what does home-based childcare actually cost in Auckland?
There is no single Auckland-wide price.
Costs can vary depending on:
- the individual educator
- the hours and days you need
- your child’s age
- whether 20 Hours ECE applies
- whether a home-based educator top-up is charged
- whether you qualify for the Childcare Subsidy
- whether you qualify for FamilyBoost
- any other agreed charges or arrangements
That is why comparing childcare based only on an advertised hourly or weekly rate can be misleading.
A more useful question is: “What will my family actually pay after the funding and subsidies available to us are taken into account?”
Questions worth asking before you enrol
When talking to a childcare provider, ask for the fee structure in plain language.
Useful questions include:
- What is the educator’s normal hourly or weekly rate?
- Does the service offer 20 Hours ECE?
- Which of my child’s hours can be covered?
- Are there any educator top-up payments?
- Are there any optional or additional charges?
- Can Childcare Subsidy be used with this arrangement?
- Will I receive suitable invoices or statements if I want to claim FamilyBoost?
A good provider should be able to explain how the arrangement works without making you decipher the funding system yourself.
Start with your family’s actual needs
Childcare cost matters, but so do the hours you need, the location, the educator, the environment and whether your child feels comfortable there. For some families, home-based childcare offers a smaller setting and an arrangement that fits well around everyday family life.
If you are looking for home-based childcare in Auckland, Home2Grow can help you explore available educators and understand how the fee and funding arrangements may apply to your family.
Contact Home2Grow to discuss your childcare needs and educators who may be available near you.
Important: Funding rules and eligibility can change. For the latest information, check the Ministry of Education, Work and Income and Inland Revenue websites, or contact the relevant agency directly.
