Crayon Conversations: the cost of childcare
If you’ve started to look into the cost of childcare in New Zealand, you’ve undoubtedly realised that it’s … not exactly budget-friendly. There are also so many childcare options for your child that it can be difficult to navigate. Co-founder of Kindello Logan Whitelaw breaks down all the childcare options, costs and some of the ways to make childcare more affordable for kiwi families.
Steph: What’s the origin of Kindello?
Logan: I worked in the early learning sector, helping people set up some amazing daycares across the country. At the same time, my wife and I found it hard to decide what type of service to choose for our son because there were no reviews by real parents. It was a stressful experience filled with a bit of guilt too. We figured there had to be a better way to help people find the best childcare for them.
Kindello is a marketplace where you can see all of your centre and home-based options in one place. You can filter the listings by the things that matter to you (such as hours needed) and read real reviews by real parents. You can instantly connect and book a visit when you find one you like.
Steph: I remember being overwhelmed by the options when I searched for childcare for my daughter. Can you give us a rundown of what’s out there?
Logan: At a high level, there are two categories: centre-based childcare and home-based childcare.
The centre-based options are all licensed by the Ministry of Education and include:
Playcentre is all about being parent-led. There’s a clear expectation that parents will be heavily involved, such as building and grounds maintenance, working bees etc.
What’s great about this: there is a strong community feel because the parents share the learning experience with their children and with other families. Additionally, it’s offered at a very small cost compared to other service types.
Why it might not work for your family: it's probably not a suitable option if you are working a lot or unable to share duties for other reasons.
Te Kōhanga Reo is a full immersion Te Reo service, and similar to Playcentre, it’s run by parents and whanau
What’s great about this: your child benefits from a full-immersion Maori experience and develops bilingual skills. Also, they can be a very low-cost option.
Why it might not work for your family: again, if you can’t commit to being heavily involved, then it's probably not a suitable option for you
Kindergartens are staffed 100% by qualified teachers, unlike daycares.
What’s great about this: everyone who looks after and educates your child is 100% qualified. They also tend to be part of a larger regional kindergarten association, which helps them maintain quality and share resources. They can be lower cost compared to daycare, but you’ll need to check when you start to inquire with them.
Why it might not work for your family: They typically only provide for children aged two and over, so your child might be too young. etc. Also, kindergartens often run shorter days than daycares (more akin to school hours) and some run morning and afternoon sessions. With parents working longer hours, some of the newer kindergartens are running extended hours.
Education and care centres (which most people would call daycare) can either be community-owned, privately owned or nonprofit. There are about 2,500 different education and care centres in New Zealand, and this is the most common type of childcare in New Zealand. To qualify as a daycare, at least 50% of the teachers must be fully qualified. At most centres in New Zealand, 80% of their teachers are fully qualified because they get a higher level of funding from the government.
What’s great about this: They offer longer hours. Many centres open at 7 AM and close at 6 PM or later to accommodate parents’ work schedules.
Why it might not work for your family: Centres can set their own fees, so therefore these fees range wildly across the country – some charge nothing and others cost well over $100 per day. The fees depend on your location and what those services offer.
The home-based options are:
Home-based Networks, such as PORSE, Tiny Nation and Kids At Home, where one educator cares for children in their home. They'll look after a maximum of four children at any one time, and no more than two of those children can be under two. The educator does not have to be a qualified teacher but a visiting teacher, who oversees around ten educators, will come to the home regularly to check on the quality of the education, provide resources and ensure consistency of care across the network.
What’s great about this: this tends to suit parents who are concerned about their child getting sick from interacting with lots of kids or whose child doesn't do that well in big groups. Some parents also just prefer the home-based environment,
Why it might not work for your family: you want your child to interact with a larger group of kids
Au Pairs are foreign exchange students who live with you in exchange for taking care of your child. You need to provide them with room and board as well as payment
What’s great about this: you have in-home care that’s less expensive than a nanny
Why it might not work for your family: you don’t have space to house them. Also, because of Covid, Au Pairs have not been able to enter the country, and this hasn't come back fully yet
Nannies work in your home. A nanny agency can help you find the right person.
What’s great about this: if you work hours outside the norm, you can find a nanny who can accommodate your schedule. Your child receives one-on-one attention from the nanny, and since they work in your home, they can help with other household tasks.
Why it might not work for your family: this is the most expensive option. Also, nannies are not part of the New Zealand early learning curriculum, so you can't guarantee you'll receive the same educational standards that other licensed services have to meet.
On Kindello, you'll find every centre-based option in the country, and we've just added some of the home-based networks recently, with more being added each week. More details about the centre-based options can be found on the Kindello blog.
Steph: Can you dive into the costs a bit more?
Logan: There's so much variation between and within the different options, so you want to talk to the specific services you’re interested in. From least expensive to most expensive:
Playcentre and Te Kōhanga Reo: we’re talking a couple of dollars a day, usually in the form of a donation. However, they will cost you more in terms of personal time invested.
Kindergarten: this is the next step up in costs. They tend to be around $2-$4 per hour, but it can vary wildly across the country.
Education and care services: some nonprofits offer entirely free services, all the way through to some daycares in Auckland that charge more than $100 a day.
Home-based networks: these sit in a similar cost range to paid education and care services.
Au Pairs: you provide room and board plus a salary [can start a $200/week and go up to $800/week depending on hours and responsibilities]
Nannies: this is the highest cost option, but it can make sense if you have multiple children in your family [rates range from $20-$35 per hour depending on location, hours, responsibilities and the nanny’s experience]
There are subsidies, which we’ll touch on later in the conversation.
If you find a centre that you feel will be the right place for your child but doesn't quite fit your budget, let them know and see what they can do for you. In some cases, they may offer your child a spot at a reduced rate for a period of time or even permanently. Their funding comes from the government, which is based on occupancy, so it's worth asking.
Steph: That’s a good tip! What are some hidden costs or things that catch first-time parents unaware?
Logan: Before you enrol, you’ll likely be made aware of:
Commitment to minimum hours: centres typically want your child to attend for three days a week at a minimum. If a child only attends one day a week, it can be difficult for the child to settle in, plus it’s hard for the centre to fill up the spaces on the other days.
Additional regular costs: centres that provide extra services such as lunch or laundry service for reusable nappies typically charge for this
Enrolment fees: this is usually a one-off non-refundable fee to confirm your child’s place
There can be some costs that you only learn once you've enrolled in a childcare centre:
Mondays and Fridays: you'll be amazed at how many Mondays and Fridays you don't end up using but still end up paying for, e.g. if you go away for a long weekend, you will still need to pay for your childcare service for the day that you're away because it's not a specified public holiday. If you're looking at enrolling a child for two or three days a week, Tuesday to Thursday are going to be your best days.
Check their holiday policy: some services make you pay even when you’re away (which makes that trip to Fiji even more expensive!), while others may allow you to take a certain number of days off per year without charging you.
Check if they have waitlist fees: some centres have a waitlist of over a year, and these services often only let you join the waitlist if you commit. They want to know how many days a week your child will attend once they’re enrolled, and you need to pay a deposit to hold that space. The deposit is usually equivalent to a week of fees, sometimes up to a month. The deposit is credited to your account when your child is enrolled at that service. This can become an issue though if you're really keen to get into a centre quickly and you're looking to go on a few waitlists.
Check if there are any paid optional activities: some centres provide paid optional activities, such as taking the children to the local swimming pool, doing yoga classes or playing ball sports.
Fundraising requirements if you’ve chosen a nonprofit centre: there will often be an expectation that you will help fundraise, such as buying raffle tickets and also selling them to others
Steph: New Zealand is one of the most expensive developed countries in the world regarding childcare. What financial support is available for the government?
Logan: there are two main types of subsidies provided by the New Zealand government
Why this exists: as a nation, we want to encourage children to start early learning before school because we know it results in better educational outcomes
Who is eligible: every child between the ages of three and five years old
How the subsidy works: 20 hours a week free at a centre registered to receive the subsidy regardless of family income. There is a maximum of 6 hours a day, so you need to split this over three and a bit days.
Good to know: Most centres allow you to claim this subsidy through them, but some don't, so it’s worth asking when you’re looking at the centre
The Childcare Subsidy: This is an income threshold subsidy
Why this exists: to give financial assistance to lower and middle-income families
Who is eligible: you have to be the child's main caregiver, and the specific income threshold depends on the number of children you have, which you can find on the Kindello blog.
How the subsidy works: the amount of subsidy you receive will depend on how much you and your partner earn and how many preschool children you have. If you are not working and you're not studying or training, the childcare subsidy will be for a maximum of nine hours a week. If you're in training or working, you can claim up to 50 hours a week in care.
Good to know: the Childcare Subsidy can't be used for the same 20 hours if you're already claiming that through the 20 hours ECE Subsidy
Steph: Now, let’s move to questions from the audience. What different approaches or philosophies can a centre have, such as Montessori? How do you find the right one for you
Logan: There's a lot out there! There's Montessori, Steiner, Reggio Emilia etc., and I wouldn't do justice by going into the specific details of each one. This might be slightly controversial, but I'd say don't get too hung up specifically on a philosophy. Visit three to five services and take the philosophy as part of the overall offering. Walk around to get a feel for the environment and the vibe.
You might visit a Montessori centre that is calm and quite structured or a centre that’s not as structured, and the kids are having a good time using natural materials such as hammers and nails, and another one that’s a bush kindergarten where the children play in the mud near a creek running through the back. Find one that resonates with you - that might end up being more important than their philosophical approach.
Steph: What are the main differences between middle-tier and top-tier daycares? What are you getting the more you pay?
Logan: Some of the coolest centres I’ve visited are nonprofits that don’t charge anything. But in general, centres that charge more may have more qualified teachers who have been there for a long time, better customer service in terms of the updates they provide parents, good teacher-student ratios, and newer equipment and buildings. I suggest you visit one centre at a lower price point and another at a higher price point to see if you can tell the difference.
Crayon’s Financial Baby Prep Program includes handy interactive tools where you can input your childcare choices to see how much it’ll cost you. Ask your employer if they offer the Program, and if not, encourage them to do so!
Steph: What are some of the best questions to ask when you go visit a childcare option?
Logan: Go in with an open mind and see what it feels like. The questions that I would be asking them:
What do you do to help my child transition into the centre? What does the settling routine look like? How many visits do we do when we first come on board?
What does a day in the life of the centre look like?
What's your ratio of carers to children? What percentage of your staff are qualified teachers?
Ask about anything important to you e.g. do you do any structured outdoor activities? Is it structured learning where you have allocated times for activities, or are you child-led?
Ask about fees: what's your holiday policy? What's your sickness policy? What happens if there is a lockdown? What happens if there is a disease outbreak at the centre (e.g., gastro)?
Guest question: How common is it that you need to provide your own food at a daycare centre? And typically, how accommodating are centres for common allergens?
Logan: about 50% of centres provide meals, and about 50% don't. Generally speaking, it’s the newer centres tied to bigger brands (e.g., New Shoots, Kindercare, Best Start) that provide food and some of it is amazing. The smaller centres that are a little bit older tend not to offer lunch because they've been built without commercial kitchens. Centres are really good at being allergen sensitive, and staff are trained to use EpiPens. Once again, just ask them what their policy is around this when you visit
Steph: Is there anything you wish you had known as a parent earlier?
Logan: We actually left it late to start looking at early learning options for my son and had to go on waitlists. I wish I knew to start earlier. Also, the more you know, the less guilt you feel because you feel that you have the knowledge to make the right decision.
Steph: Thank you, Logan! This has been so fascinating - I wish I had known much of this when looking for childcare.
Note: Crayon Conversations is your chance to hear from the experts in the field, dive deep into their area of knowledge and ask your own questions. Sign up here to find out about our upcoming conversations.
Our first expert, Logan Whitelaw, is a father of two and the co-founder of the largest childcare marketplace in New Zealand, Kindello. Logan has over a decade of professional experience in the early childhood education sector and has been involved in setting up 250 centres.
We edited this conversation for length and clarity, but honestly, Logan shared so many gems that we had to keep most of it in! You can watch the original recording below:
Now for the important legal part: The information we provide is general and not regulated financial advice for the purposes of the Financial Markets Conduct Act 2013. Please seek independent legal, financial, tax or other advice in considering whether the content in this article is appropriate for your goals, situation or needs. The information in this article is current as at 21 September 2022.
Logan Whitelaw
Co-founder, Kindello
Stephanie Pow
Founder and CEO, Crayon
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