The Government is moving to require in home-child educators to have at least a level four qualification, in a move to ensure more consistent quality throughout the sector.
In-home early childhood education currently receives $150 million per year in public funding, but around 70 percent of educators do not have a qualification.
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More than 18,000 children received education and care from a home-based educator in 2018.
The decision will become part of the strategic Plan for Early Learning, once finalised. The draft strategic plan is currently open for consultation.
"We've heard from educators and parents about the unique place that home-based learning holds, in particular the family-feel it provides, with small groups and close relationships," Education Minister Chris Hipkins said.
"But we have also heard concerns about inconsistent quality across the sector, due in part to inadequate government oversight."
Mr Hipkins said the proportion of services with qualified educators has dropped over the past decade, prompting the move.
"I will work with the sector to determine an appropriate time for this qualification requirement to become mandatory.
"This change represents a substantial shift and it is important to minimise disruption to parents and whānau."
The move will also affect in home child carers known as au pairs, a group Mr Hipkins said could not have been left out.
"While I believe au pairs provide valuable support to parents, exempting this group would have undermined the intent of the policy.
"As there is no definition of au pair in the current regulatory framework, an exemption could have led to unintended rapid growth in the unqualified au pair market. This could lead to significant variability in quality across home-based early childhood education."
Te Ara Tuarua, the Level 5 kōhanga reo qualification, will be recognised as an equivalent qualification for funding purposes.