Funding for Building Financial Capability services through Budget 2020
This information refers to completed programmes and investments and has been retained for archival use.
In Budget 2020, the Government invested $39.2 million over four years in Building Financial Capability (BFC) services. The investment supported more sustainable BFC services, responded to the additional demand of individuals, families and whānau as a result of the economic impact of COVID-19, and expanded specialist debt solution services.
The investment included:
- $9.7 million over four years to recognise the increasing costs of delivering BFC services and address immediate cost pressures to assist with continued delivery of BFC services.
- $25.2 million over two years, as part of the Covid-19 Response and Recovery Fund (CRRF), to support BFC services to become sustainable and able to respond to increased demand as a result of COVID-19.
- $4.3 million over two years as part of the CRRF for the expansion of specialist debt solution services to address problem debt. This also included debt support and debt consolidation loans to help people with variations to high-cost loans.
Factsheets on the funding through Budget 2020 can be found here. Information on the breakdown and allocation of funding is provided below.
High level breakdown of Budget 2020 funding
The table below breaks down the Budget 2020 investment in BFC services across four years.
|
($m) |
20/21 |
21/22 |
22/23 |
23/24 |
Total |
|---|---|---|---|---|---|
|
Cost pressure funding |
2.425 |
2.425 |
2.425 |
2.425 |
9.700 |
|
CRRF: supporting sustainable services and increased demand |
11.402 |
13.810 |
0.000 |
0.000 |
25.212 |
|
CRRF: expanding specialist debt services |
1.681 |
1.981 |
0.000 |
0.000 |
3.662 |
|
Service design and implementation |
0.330 |
0.330 |
0.000 |
0.000 |
0.660 |
|
|
15.838 |
18.546 |
2.425 |
2.425 |
39.234 |
Allocation of funding by service
The investment through Budget 2020 included funding for Financial Mentoring, MoneyMates, BFC Plus (Kahukura). Additional funding for Micro-finance; Specialist debt solution services was provided through the CRRF.
Cost pressure funding allocation
All cost pressure funding was allocated to support the sustainability of Financial Mentoring, MoneyMates and BFC Plus services. This was applied as an increase in session rates.
|
BFC service($m) |
Cost pressure |
|---|---|
|
Financial Mentoring / MoneyMates |
2.170 |
|
BFC Plus (Kahukura service) |
0.255 |
|
Total |
2.425 |
CRRF funding
As well as MSD’s base level of funding for BFC services, additional CRRF funding for BFC services was allocated in 2020. The table below breaks down the CRRF funding.
|
Breakdown of additional COVID-19 funding allocated by service type ($m) |
20/21 |
|---|---|
|
Financial Mentoring / MoneyMates |
9.884 |
|
BFC Plus (Kahukura service) |
0.590 |
|
Community Finance / micro-finance |
0.495 |
|
Workforce development |
0.432 |
|
Total |
11.402 |
Supporting sustainable services
$5.7 million of the CRRF funding was allocated to support the sustainability of Financial Mentoring, MoneyMates and BFC Plus services. This was applied as an increase in funding rates for these services.
How we made funding decisions
Financial Mentoring, MoneyMates and BFC Plus
A COVID-19 hardship allocation model was developed to indicate the relative need across regions and target areas. The model was used to allocate funding in an equitable and transparent manner.
Providers were allocated a percentage increase of funding for the target area through the model and this increase has been applied as extra sessions.
While the model covers all target areas across New Zealand, not all of these have MSD-funded BFC providers currently operating. Where funding was allocated to areas without suitable providers, this funding was allocated to nearby providers able to service that area.
If you would like further details about the hardship allocation model email Financial_Capability@msd.govt.nz
BFC Plus (Kahukura)
Increased Kahukura funding was allocated as four additional full-time equivalent (FTE). The COVID-19 hardship allocation model identified the four highest regions of need. These regions were:
- Waikato
- Canterbury
- Auckland West
- East Coast.
We also consulted on the proposed increases, as allocated by the model, with Oranga Tamariki.
Microfinance services
MSD currently funds two providers to deliver microfinance services. Four additional FTE for microfinance services were allocated to these two providers for 2020/21 and 2021/22.
Specialist debt solution services
From November 2020, additional funding was used to strengthen existing debt solution services with access to debt specialists.
More information on debt solution services is available here https://www.msd.govt.nz/what-we-can-do/providers/building-financial-capability/microfinance-debt-solutions.html
Workforce Development
MSD invested in FinCap to ensure that training material and supporting information systems are fit-for-purpose. This includes material being quality assured by industry bodies and that the Financial Mentor Introductory Course incorporates a:
- Ahuatanga Māori cultural perspective
- Pasifika perspective
- Young people perspective.
We are also ensured that Financial Capability facilitators receive training on how to deliver training for an online format.
Other deliverables included:
- Guidance for recruitment
- Credentialing the Financial Mentor Introductory Course with NZQA
- Templates that align to the Social Sector Accreditation Standards
Allocation of funding for 2021/22
In late 2021, the final part of the Budget 2020 BFC investment was distributed to BFC providers using the CRRF Conditional Grants
