A budgeting expert says families will be breathing a sigh of relief at not having to pay school donations next year.
The scheme will see decile one to seven schools receive a Government payout of $150 per student per year, in a bid to stop schools seeking donations from parents.
Around 416,000 children are set to benefit from the scheme, which will cost the Government around $62 million.
Darryl Evans, chief executive of Mangere Budgeting Services, says the current need to pay school donations puts huge pressure on parents and students, especially those that struggle financially.
"Some schools exclude kids from extracurricular activities such as sporting events, we've heard of teenagers at college being refused access to the ball," says Evans.
For some families, the need to pay the donation means children end up skipping classes.
"I'm always aware when it's time to go back to school, kids aren't going back to school because parents can't buy the school uniforms and the stationary. But very often the school donations is also discussed."
Evans says the move is a win for all parties.
"Schools know who is struggling and who is not struggling. I would encourage them to be part of the scheme."
So far more than 1500 schools have joined the scheme.