What Is the Equity Index? NZ's New School Funding Model
The old decile system is gone. Here's what replaced it, how the Equity Index works, and what it means for schools and families across New Zealand.
Why Deciles Were Replaced
For decades, New Zealand schools were rated on a decile scale from 1 to 10. Decile 1 schools drew students from the lowest socio-economic communities, while decile 10 schools drew from the highest. The system was intended as a funding tool — lower-decile schools received more government funding to address disadvantage.
In practice, however, deciles became widely misunderstood. Many parents used the decile rating as a proxy for school quality, assuming that a decile 10 school was automatically "better" than a decile 3 school. This perception reinforced inequity, as families avoided lower-decile schools and those schools found it harder to attract students and staff.
The decile system also had a significant technical limitation: it was based on census data for the area around the school, not on the actual circumstances of the students who attended. A school could have a high decile rating even if many of its individual students came from disadvantaged backgrounds.
How the Equity Index Works
From January 2023, the Ministry of Education replaced the decile system with the Equity Index (EQI). The EQI is a more precise measure of disadvantage because it is calculated at the individual student level, rather than using area-based census data.
The EQI draws on data linked to each student's household, including:
- Household income
- Parental education levels
- Household crowding and housing quality
- Income support or benefit receipt
- Other indicators of socio-economic disadvantage
Each school receives an EQI value that reflects the average level of disadvantage among its students. Schools with higher EQI numbers have greater levels of student disadvantage and receive more equity funding. Schools with lower EQI numbers have less disadvantage and receive less equity funding.
What the Numbers Mean
The EQI is expressed as a number, typically ranging from around 400 to 520 or higher. Unlike the old 1-to-10 decile scale, the EQI does not fit neatly into labelled bands. However, as a rough guide:
- Lower EQI values (around 400-430): schools serving communities with relatively low levels of disadvantage.
- Mid-range EQI values (around 430-470): schools with moderate levels of disadvantage.
- Higher EQI values (around 470-520+): schools serving communities with significant levels of disadvantage, receiving the most equity funding.
The Ministry of Education uses the EQI to allocate equity funding across a continuum, rather than the abrupt jumps that occurred at decile boundaries.
How EQI Affects School Funding
The EQI directly determines how much equity funding a school receives from the government. This funding is on top of the base operational funding that all schools receive. The purpose is to provide additional resources to schools whose students face the greatest barriers to achievement.
Schools can use equity funding for a range of purposes, including additional teaching staff, learning support, pastoral care, and programmes to support attendance and engagement. The transition to EQI means that funding is more accurately targeted to where it is needed most.
What EQI Is Not
It is crucial for parents to understand that the EQI is not a measure of school quality. A school with a high EQI is not a "bad" school, and a school with a low EQI is not automatically "good." The EQI measures the socio-economic context of a school's student body, nothing more.
School quality is better assessed through other means: ERO reports, student achievement data, the school's culture and values, the quality of teaching, and how well the school supports each child's learning and wellbeing.
The Bigger Picture
The shift from deciles to the Equity Index represents a meaningful step toward fairer school funding in New Zealand. By measuring disadvantage at the student level rather than the area level, the EQI ensures that resources follow the students who need them most — regardless of where the school is located. For parents, the key takeaway is simple: look at the whole picture when choosing a school, and do not let a single number define your expectations.