Home-Based Educator Top Up Payment: What Does 20 Hours ECE Cover?

Here is the part that rarely makes it onto a flyer: 20 Hours ECE does not automatically mean 20 hours of childcare that costs you nothing. What the rules actually promise is narrower. Your child's service cannot charge you fees for the hours claimed as 20 Hours ECE. In home-based care, the rules also allow one extra payment for those same funded hours, and plenty of parents only find out about it once they are sitting down with the enrolment form.

That payment is called the home-based educator top up payment. It is allowed, it is capped, and it has to be agreed and recorded in your enrolment agreement before an educator can require it. It only exists in home-based services, which is why general guides to 20 Hours ECE tend to skip straight past it.

This checklist covers what the funding pays for, where the top up fits, and what you might still pay. Amounts change, so for anything with a dollar sign we point you to the Ministry of Education, Work and Income and Inland Revenue.

One friendly nudge before you start: every Kuddles educator cares for a maximum of four children, so places with a particular educator can fill before you expect. If your child turns three in the next few months, send us an enquiry now and we will talk you through how the funding would work for the hours you have in mind.

Step 1: Check Your Child's Eligibility Dates

The first job is simply getting the dates right, because the funding switches on and off on specific days rather than at the start of a term.

According to the Ministry of Education's funding rules, a child's eligibility for 20 Hours ECE begins on their third birthday. It ends on the day before their sixth birthday, or on their last day of attendance before they start school, whichever comes first. So a child who starts school at five stops being eligible when they leave early learning, not when they turn six.

Children under three can still attend home-based care (Kuddles educators care for children from birth to six), but the no fees rule does not cover those younger years. Other support, covered in Step 7, matters more then.

Your action item: write down the day your child turns three and the day you expect them to start school, and share both with your educator early. The Ministry of Education's 20 Hours ECE page has the current official detail if you want to double check.

Quick takeaways

• Eligibility starts on your child's third birthday, not at the start of a term.
• It ends the day before they turn six, or when they start school, whichever comes first.
• Younger children can still attend care, but the no fees rule for funded hours does not apply yet.

Step 2: Confirm the Service Offers 20 Hours ECE

Here is something that catches people out: 20 Hours ECE is not something every early learning service has to provide. Services choose whether to offer it.

What the rules do say is that a service which offers 20 Hours ECE must offer it to all eligible children. It cannot quietly limit the funding to certain days, certain hours, or only some of the eligible children in its care. The number of funded hours your child can receive does still depend on practical things, such as the service's hours of operation, the space available and the hours your child is actually enrolled for.

In home-based care, space is real and limited, because each educator works with a small group in their own home. Kuddles supports 20 Hours ECE, and each educator cares for no more than four children. If home-based care is new to you, our guide to how home-based childcare works explains the day to day side.

Your action item: ask each service, "Do you offer 20 Hours ECE, and how many of my child's enrolled hours would it cover?" Get the answer in an email you can refer back to.

Quick takeaways

• Offering 20 Hours ECE is a choice each service makes, so always ask.
• A service that offers it must offer it to every eligible child, with no cherry picking of days or children.
• Funded hours still depend on opening hours, space and your child's enrolled hours.

Step 3: Plan Your Hours Across the Week

Now for the part that is genuinely worth a pen and paper. 20 Hours ECE has two limits, and they apply at the same time: a maximum of six funded hours per day, and a maximum of 20 funded hours per week. Those limits are a total across every service your child attends, not per service.

That means a long day does not use up more of your allowance than six hours. If your child spends seven hours with an educator, one of those hours sits outside 20 Hours ECE, and ordinary fees can apply to it. Parents can only be charged fees for hours outside that daily and weekly maximum.

You are also allowed to split the funded hours between more than one early learning service, as long as the combined total stays within six a day and 20 a week. The Ministry also notes that if your child's usual service closes for the school holidays, you can use 20 Hours ECE at another service for that period.

Your action item: sketch a normal week. For each day, mark how many hours fall inside the six hour limit, then check the weekly total does not pass 20. Any hour left over could carry a fee, so ask about it.

Quick takeaways

• The limits are six funded hours per day and 20 per week, combined across all services.
• Hours beyond either limit can carry ordinary fees.
• You can split funded hours between services, as long as the total stays within the limits.

Step 4: Understand the Home-Based Top Up Payment

This is the step most 20 Hours ECE guides leave out, and it is the one that explains why a home-based statement can look different from what you expected.

In home-based care, the service provider receives the 20 Hours ECE funding and passes a portion of it on to the educator for each funded child hour. The Ministry calls this the pass-through. Sometimes the pass-through is lower than the educator's usual hourly fee, meaning the fee they charge for hours outside 20 Hours ECE.

When that happens, the rules allow the educator to ask parents for a home-based educator top up payment. Here is exactly what it covers, and what it does not:

It covers the gap between the pass-through and the educator's usual hourly fee, for the hours claimed as 20 Hours ECE. It is worked out per child. It must be no more than that difference, so it can never be a bonus on top of the educator's normal rate.

It does not apply to hours outside 20 Hours ECE, because those hours are covered by ordinary fees instead. It is not an optional extra like an excursion, and it is not a general contribution.

A few more rules are worth knowing. If the educator is an employee of the home-based service provider, a top up payment must not be charged at all. If a parent is the employer of the educator, the top up still applies as a cost to that parent, but the educator does not charge it directly. And once a parent has agreed to pay a top up, the educator can enforce it in the same way as a fee, which is exactly why it pays to understand it before you agree.

Arrangements differ between services and educators, so do not assume another family's setup matches yours.

Your action item: ask three questions and note the answers. Is the educator contracted or employed by the service? Is a top up part of this enrolment? If yes, which hours does it apply to, and how was it worked out?

Quick takeaways

• A top up can only cover the gap between the pass-through and the educator's usual hourly fee, for funded hours.
• It cannot be charged when the educator is employed by the service provider.
• Once you agree to it, it is enforceable like a fee, so ask your questions first.

Step 5: Separate Fees, Optional Charges and Donations

The funding rules describe four types of payment a family might come across during 20 Hours ECE: fees, donations, optional charges and home-based educator top up payments. You have already met the top up. Sorting the other three is what keeps a statement easy to read.

Fees are compulsory payments tied to enrolment. They cannot be charged for hours claimed as 20 Hours ECE, but they can apply to hours outside it. Services must document their rates, and any changes to them, and give that information to parents.

Donations are purely voluntary. A service must not describe a donation as a fee, or use any wording that makes it sound compulsory.

Optional charges are payments you choose whether or not to make, for a specific purpose. They can be requested for things above what regulations require, such as excursions, transport, sunscreen or food, or items you could otherwise provide for your own child. You must be told in writing that agreeing to an optional charge is not compulsory, and it cannot be a condition of enrolling. The rules also say optional charges cannot be used for things like wage top ups, administration of 20 Hours ECE, or general contributions toward the cost of care.

If you say no to an optional charge, you simply do not receive that particular extra. Your child's funded hours stay the same.

Your action item: ask for a written list of every payment connected to your child's enrolment, with each one labelled as a fee, a donation, an optional charge or a top up. If something is not labelled clearly, ask which of the four it is.

Quick takeaways

• Fees cannot apply to funded hours, only to hours outside 20 Hours ECE.
• Donations are always voluntary and cannot be dressed up as fees.
• Optional charges need your written agreement and can be declined.

Step 6: Read the Enrolment Agreement Before You Sign

Everything in Steps 1 to 5 ends up in one document, so this is the step where a careful ten minutes really pays off.

For each child receiving 20 Hours ECE, an attestation included in the enrolment agreement must be signed. A service cannot claim 20 Hours ECE funding for your child until it has that completed, signed attestation. In it, you confirm the total hours per day of 20 Hours ECE your child will receive at this service and at any other service they are enrolled with. It is your confirmation that you are not doubling up beyond the limits.

Your agreement to any optional charges or top up payment must also be recorded in the enrolment agreement form, and services must keep records of the amount and type of every payment. Where a parent pays a home-based educator directly, the service must record all 20 Hours ECE payments between parent, educator and service provider, including the pass-through.

If your child's hours change, or they start at another service, let the service know so the agreement can be updated.

Your action item: before signing, check the hours match your Step 3 plan, every payment is labelled by type, and any top up is written down. Keep a copy.

Quick takeaways

• Funding cannot be claimed until you have signed the 20 Hours ECE attestation.
• Top ups and optional charges must be recorded in your enrolment agreement.
• Tell the service whenever hours or other enrolments change.

Step 7: Line Up Work and Income and FamilyBoost Support

Kuddles families can use three kinds of support: 20 Hours ECE, childcare assistance from Work and Income, and FamilyBoost. They work alongside each other rather than stacking on the same hours, so it helps to know which one applies where.

Work and Income. Under the Ministry's rules, children receiving 20 Hours ECE cannot also receive Work and Income childcare assistance for those same hours. The one exception is the home-based educator top up. Where a top up applies to the funded hours, families may be eligible for childcare assistance from Work and Income to help with that cost. Work and Income assistance can also be relevant for younger children and for hours outside 20 Hours ECE. Work and Income sets the eligibility criteria and rates, so check with them directly for your situation.

FamilyBoost. FamilyBoost is run by Inland Revenue and helps eligible households with early childhood education fees they have paid. Inland Revenue sets the household income criteria and decides which payments count, and claims are made through myIR. Because the rules focus on what you have actually paid, keeping clear records matters.

Your action item: check the Work and Income childcare assistance information and the Inland Revenue FamilyBoost page against your circumstances, and keep every receipt, ideally showing the payment type.

Quick takeaways

• Work and Income assistance does not cover 20 Hours ECE hours, except where a top up applies.
• FamilyBoost is an Inland Revenue payment for eligible households, based on fees paid.
• Labelled receipts make both applications far easier.

Step 8: Get Answers to the Questions Parents Ask Most

Your final action item: take the questions below to your first visit or phone call, and tick them off as you go.

Is 20 Hours ECE completely free in home-based childcare?

You cannot be charged fees for the hours claimed as 20 Hours ECE. In home-based care, an educator may ask for a top up payment covering the gap between the funding passed on to them and their usual hourly fee, but only if you agree and it is recorded in your enrolment agreement. Optional charges and donations can also come up, and you can decline both.

Can my child use 20 Hours ECE at two different services?

Yes. You can split the funded hours between services, as long as the combined total is no more than six hours a day and 20 hours a week. You confirm those totals in the attestation you sign with each service.

Can Work and Income help with a home-based educator top up payment?

The Ministry's rules say families may be eligible for childcare assistance from Work and Income to help with the cost of a top up payment. Work and Income decides eligibility and rates, so contact them about your situation.

When does my child become eligible for 20 Hours ECE?

Eligibility begins on your child's third birthday. It ends the day before their sixth birthday or on their last day of attendance before starting school, whichever comes first.

Quick takeaways

• Funded hours carry no fees, but a top up may apply in home-based care if you agree to it.
• Funded hours can be shared between services within the daily and weekly limits.
• Work and Income may help with a top up, and it sets the rules for who qualifies.

Families across Auckland, from the Hibiscus Coast to South Auckland, come to Kuddles for small group care in a real home, with police vetted, ECE qualified educators who follow Te Whāriki. With no more than four children per educator, the right fit near you may not stay open long. If a third birthday or a return to work is coming up, enquire with Kuddles today and we will help you work through the funding for your family's hours.