Doubts about the quality of home-based early childhood services and concern over some companies' financial arrangements are driving an overhaul of the sector, government documents show.
The home-based early childhood sector had 18,440 enrolments last year and it receives more than $100m a year in government subsidies. Photo: 123RF
The government has proposed major changes including introducing a minimum qualification for carers and safeguards to ensure they are fairly paid and better supervised.
It also proposed giving the Education Review Office the right to enter homes to assess the quality of care and education, and ensuring parents were not over-charged for the service they received.
The action comes seven years after a government advisory group called for an urgent review of home-based care and education.
The sector has grown rapidly from 8937 enrolments in 2000 to 18,440 last year and receives more than $100 million a year in government subsidies.
A cabinet paper supporting the proposed changes said 70 percent of home-based educators did not have an early childhood qualification and though they were supervised by qualified teachers that oversight could be inconsistent.
The paper said home-based services were less likely to meet minimum standards than centre-based services.
"Ministry data suggests home-based services are less likely to maintain minimum licensing standards, across every type of licensing standard - whether it relates to the curriculum, health and safety or specific regulated standards like adult to child ratios standards. This is reflected in the higher percentage of home-based services that have interventions in place. As at 23 July 2018, 13% of home-based services had provisional or suspended licences, compared with other ECE services types which had approximately 3%," the paper said.
"Ministry funding audits show that home-based services are over three times more likely to over-claim government funding than other ECE service types. The Ministry has little oversight of what government funding is being used for, and whether the use of government funding matches the policy intent."
The paper said large home-based providers kept all of the government subsidy and used parents' fees to pay their educators, most of whom were treated as contractors. It said this often resulted in educators earning below the minimum wage.
"Educators typically receive a rate per child and depending on the rate, it is possible for them to earn less than the minimum wage unless they are caring for four children. Furthermore, there have been instances where educators have received vouchers instead of money," it said.
"The Ministry also became aware that parents may not know that their child is generating a government subsidy, resulting in instances of parents bearing a disproportionate share of the cost of ECE. The Ministry has observed that some providers do not generally make parents aware of the ECE subsidy, nor the level of subsidy their child generates across both 20 hours ECE and the ECE subsidy."
The government proposed that home-based companies should be required to hire their educators as employees, or pay them the government subsidy.
It suggested that all educators should have at least a level 4 certificate in early childhood education, and that supervising teachers should visit each home-based educator as often as once a week.
It also proposed that home-based companies should report their income and expenditure to the Education Ministry and should inform parents about the level of government subsidy they received.
In 2011 a government advisory group called for an urgent review of home-based, but the review was abandoned in 2012.
One of the members of the group, Peter Reynolds from the Early Childhood Council, said the government's proposals were a good attempt to level the playing field between early childhood centres and home-based services.
"It's important that parents get an assurance of the same level of expectation, the same level of quality that they might in other parts of the sector," he said.
Mr Reynolds said introducing a minimum qualification for home-based educators was particularly important.
But Home Education Learning Organisation spokesperson Raewyn Overton-Stuart said many very good educators would leave the sector rather than attempt a qualification.
"That would be massive. We have a largely untrained workforce so there would be a significant investment needed to put all of the educators through a qualification," she said.
Ms Overton-Stuart said there were other measures of quality, such as providing education with a small number of children per adult.
She said the organisation also disagreed with a government proposal that companies should employ home-based carers directly.
"It's going to increase the cost on average, we believe, by 150 percent, which would have to be passed on to the family and it's obviously not sustainable," she said.
"The current self-employed model works for us."
Susan Phua from the Home-Based Early Childhood Education Association said its members were still considering the government's proposals.
The sector had wanted a review for the past 10 years because the Education Ministry did not fully understand the way it worked, she said.