One school will get more than $100,000 from a new funding stream targeting children from families on long-term welfare, Education Minister Hekia Parata says.

Photo: RNZ / Rebekah Parsons-King

The government is telling schools today how much money they will get next year from the $12.3 million fund it introduced instead of a one percent increase to school's operations grants.

The funding is targeted to about 133,000 students at 2421 schools and is widely regarded as a test run of a possible replacement for the decile system, which allocates extra funding to schools with a high number of children from disadvantaged neighbourhoods.

Ms Parata told Nine to Noon each eligible child would attract $92 for their school. If the money had been allocated as a general increase to the operations grant for all schools, it would have been worth $16 per child.

She said that meant schools with a high concentration of eligible children would be better off under the targeted funding.

Some schools would get a few hundred dollars, while others were getting $57,000 and one would receive $109,000 next year.

Ms Parata said schools would not know which children had attracted the funding and it would be up to schools to decide how to spend the money.

However, she said the funding should help schools improve children's achievement.

"I expect them to grow learning and raise achievement of all the kids in their school," she said.

"It's also recognising what the sector has been saying for some time - 'for these kids who have particular challenges, we need more support'," she said.

Post Primary Teachers Association president Angela Roberts, said schools in poor areas needed nearly $300m more than they already received.

"We have been looking at examples from the Netherlands and the USA that show a marked improvement in achievement by disadvantaged students after extra funding was allocated to those schools," she said.

She said extra staffing was especially important and most likely to lift achievement.

Ms Roberts said the PPTA estimated the amount needed to adequately compensate for the disadvantages some students faced needed to rise from $120 million per year to at least $400 million.

NZ Educational Institute (NZEI) president Louise Green said the targeted funding would not have a significant impact because it would provide less than $2 a week per eligible child.

"This targeted fund is worth less than half a sandwich per child. Schools are under-funded and the education budget needs to increase if we are to see all children have an equal chance to succeed," she said.

Ms Green said that using targeting without an increase in universal funding through the operations grant was robbing Peter to pay Paul.

"You can't turn around rampant inequality outside the school gate with crumbs inside it. Schools need much more significant resourcing," she said.

Global funding

Ms Parata told Nine to Noon she was disappointed that teacher unions NZEI and PPTA were holding paid union meetings to discuss opposition to a proposed change to school funding.

The unions were preparing to fight a suggestion known as global funding, which would allow schools to trade their staff funding for money they could spend on other things.

Ms Parata acknowledged the change would make it possible for schools to exchange some of their teacher funding for cash.

But she was sure that schools would not use it that way.

"I actually have quite a lot of confidence in principals and boards to understand as we have been saying as a government and I have been saying as a minster and all of my actions as a minister point to this, that it is the quality of teaching and the quality of leadership that make the most difference in schools," she said.

"Why would we be interested in a policy that would cut across that?"

Education Ministry deputy secretary Ellen MacGregor-Reid told RNZ schools could already cash up unused staffing through a system known as "bank staffing", but that happened after each school year had finished.

"Schools that underuse their staffing entitlement receive a cash reimbursement the following year, up to a maximum of 10 per cent of their annual staffing entitlement," she said.

"Under the global budget, schools would be able to plan their staffing usage and expenditure from the beginning of the year."

Ms MacGregor-Reid said in 2015, the reimbursement rate was $53,500 plus GST per full-time teacher equivalent (FTTE) and 832 schools (35 percent) underused part of their staffing entitlement.

She said 101 schools (4 percent) underused by at least 0.5 FTTEs and 38 schools by at least 1 full-time teaching position.