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How primary care funding is set

Each year, the Government sets overall funding allocations for the health system through the national Budget process. Funding for primary and community care is allocated to Health New Zealand |Te Whatu Ora, which is responsible for determining how this funding is distributed to general practices and other providers.

Decisions about annual general practice funding, including capitation uplifts and co-payment setting are made through the PHO Services Agreement Amendment Protocol (PSAAP).

The PSAAP group brings together representatives from PHOs and contracted providers, and Health NZ, to negotiate updates to the PHO Services Agreement (PHOSA). The PSAAP process may also be used to agree additional performance incentives and other general practice related budget allocations as appropriate.

Annual primary care funding 2025/26

On 23 June 2025, Health New Zealand | Te Whatu Ora and sector representatives agreed to the largest uplift in general practice funding in more than a decade.

This investment supports improved access to care, strengthens frontline primary care services, and lays the foundation for longer-term system improvements.

What's been allocated

The Government has committed $180 million in new funding for general practice in 2025/26.

Find out more, including next steps for primary care under each of the key funding elements below.

Capitation

For 2025/26 there will be a 6.43 percent increase to general practice capitation funding, plus a further ~6% increase through contingent capitation – see below.

Capitation funding is the core way general practices are funded. Through capitation, practices receive a set amount of funding per enrolled patient, per year, from Health New Zealand. The amount varies based on age and gender.

This funding helps cover the cost of delivering essential primary care services, such as general consultations, routine checks, and preventive care. Capitation allows practices to focus on providing continuous, relationship-based care for patients, rather than relying only on fees for individual visits.

Practices will receive their uplifted capitation funding through their PHO, with Health New Zealand providing the funding to PHOs each month starting from 1 July 2025.

Capitation rates from 1 July 2025 are available Health NZ Capitation page.

Contingent capitation

Contingent capitation is a new stream of $60 million of capitation funding that supports improved access to care and starts to move toward performance based funding for general practice services. The initial focus in on improving the quality and availability of primary care data, as a foundation for further performance based arrangements.

This year practices are asked to participate in data-sharing with Health NZ, which will inform national service planning, system and provider performance monitoring, and equity improvements. Participation is voluntary, and practices can opt out with notice.

Find out more

Find out more

From 1 July 2025, all general practices will begin receiving contingent capitation funding as part of the annual primary care uplift.

Access to this funding is contingent on participation in data sharing with Health New Zealand, to support the development of a national administrative primary care data repository, which will support future performance based funding.

The data will be encrypted like the national hospital data sets. It will be used to: 

  •  Monitor health system performance and access
  • Track workforce trends and service utilisation
  • Assess performance and clinical outcomes
  • Support service planning and funding decisions under the Pae Ora Act

Data sharing will begin once the data framework and processes are finalised:

Practices can opt out of data sharing at any time before or after implementation begins, by giving notice to their PHO.

  • All practices will automatically receive this funding from 1 July
  • Practices can opt out at a later date (with advance notice)

Performance based capitation (Immunisation)

One of the Government’s five health targets is for 95% of children to be fully immunised at 24 months of age by 2030. Early enrolment and on-time 6-week immunisations are key to achieving this goal.

From 1 July 2025, up to $30 million in performance-based funding is available to general practices that improve their 6-week immunisation rates.

Guidance on targets, reporting and funding calculations will be available via PHOs.

Find out more

Find out more
  • All practices are eligible for this funding in 2025/26.
  • Practices with current rates below 85% are expected to improve by 10 percentage points over 12 months.
  • Practices already above 85% should aim to reach or maintain 95% coverage.
  • Performance will be assessed quarterly. Practices that maintain or improve rates will receive additional funding each quarter.
  • A guidance document is available for PHOs and practices explaining how performance is measured and how funding is calculated.
  • Details are set out in Part G, Schedule G2 of the PHO Services Agreement (PHOSA)

Master PHO Services Agreement [PDF, 1.1 MB]

Co-payments

Each year, the Annual Statement of Reasonable Fee Increases (ASRFI) sets the guideline for how much practices can increase patient fees. It’s important that co-payment increases are carefully managed to balance the rising costs of delivering care with the need to keep general practice affordable and accessible for patients, especially those on low incomes or with higher health needs.

Annual statement of reasonable fee GP fee increases - 2025/26 update [PDF, 243 KB]

For 2025/26 the weighted average increase in input costs was calculated at 6.43%. PSAAP agreed to a total government uplift of 9.69%, combining a 6.43% capitation uplift, and 50% of the contingent capitation funding ($30 million).

Find out more

Find out more

Based on this uplift:

  • Practices with a 50/50 funding split (Government vs patient co-payments) may increase fees by up to 3.17%.
  • Practices with a 50/50 funding split not participating in contingent capitation funding may increase fees by up to 6.43%.

We expect for most practices, the allowable increase will be 3% or less. Practices increasing fees above 3% may be referred to the Fees Review Committee.

The cap for fee increases without referral has been raised from $65 to $67 for 2025/26.

Very Low Cost Access (VLCA) and Community Service Card (CSC) Co-payment Increases 

To help ensure care remains affordable for those on low incomes, a 3% increase has been applied to capped co-payment rates:

  • CSC holders aged 18+: $20.00 (up from $19.50) 
  • CSC holders aged 14-17: $13.50 (up from $13.00)
  • Non-CSC patients aged 18+ at VLCA practices: $30.50 (up from $29.50)

Minor planned care

This funding ($5 million) will support general practices to deliver minor procedures in community settings to reduce pressure on hospitals.

It will be used to expand access to minor planned care procedures in the community that will be made available to the sector once implementation details are worked through. This will reduce wait time for procedures such as minor gynaecological procedures, skin excisions, iron infusions, and oncology infusions.

Find out more

Find out more

Services may include:

  • Minor gynaecological procedures
  • Skin excisions
  • Iron infusions
  • Oncology infusions

Health New Zealand will release further implementation details in the coming months.

Further immunisation funding

Immunisation funding will increase from 1 July 2025. This includes:

  • A 6.43% uplift to the immunisation budget. 
  • The application of $9.1 million previously used for Nurse Pay Disparities.

Find out more

Find out more

As a result, the following immunisation rates will increase:

  • Standard immunisation rate: $46.00 (GST exclusive).
  • Influenza rate: $37.50 (GST exclusive).
  • New co-administration fee: $20.52 (GST exclusive) for each additional immunisation given in the same session.

COVID-19 immunisation administration will transition into the PHO Services Agreement (PHOSA) over the next 12 months.

New rates for standard and influenza immunisations can be claimed from 1 July 2025. The co-administration fee and transition of COVID immunisation into the PHO Services Agreement will follow once required system updates are complete. Practices will receive backdated payments from 1 July once those updates are in place. We’ll keep you updated and will advise when changes take effect.In addition to the uplifts to immunisation administration and the performance-based capitation, the FY2025/26 System Level Measure (SLM) programme has a focus on immunisation.

The SLM programme, with $26 million funding allocation related to quality improvement planning and performance, will focus on improving immunisation rates at 24 months as well as improvements related to avoidable childhood hospital admissions.

More information

Key dates

Key dates

23 June 2025 – PSAAP agreement ratified

  • The sector agreed to the 2025/26 uplift, including capitation increase and performance based funding.

1 July 2025 - implementation begins

  • Capitation uplift (6.43%) takes effect.
  • New co-payment settings take effect, including: 3.18% reasonable fee increase for practices in the contingent capitation stream.
  • Updated CSC and VLCA rates.
  • $60 million Contingent Capitation Funding begins for all practices.
  • $30 million Performance-Based Capitation for immunisations starts:
    - Measured quarterly from this date.
    - New rates for standard and influenza immunisations can be claimed (backdated co-administration fee and transition of COVID immunisation into the PHOSA will follow – dates TBC).
  • $5 million for community minor procedures signalled – implementation details still to come.

July - September 2025 (Q1)

  • Performance measurement begins for 6-week immunisation rates.
  • Practices and PHOs receive first quarterly performance reporting guidance.
  • Data Governance Group convenes to: • Finalise the primary care data framework.
  • Develop data sharing arrangements and safeguards.

October - December 2025 (Q2)

  • Quarter 1 immunisation performance payments may begin (depending on process finalisation).
  •  More detail expected from the Data Governance Group on:
    - Data standards
    - Sharing processes
    - Opt-in/opt-out mechanisms
  • Data sharing may commence in this period if systems are ready.
  • Improved clinical FTE reporting from practices will commence

1 January - 31 May 2026

  • Data sharing in place. Data back dated to 1 July 2025 for participating practices.
  • Window for practices to give notice to opt out of (data sharing) before 1 July 2026.

 April 2026

  • Quarter 3 immunisation performance assessments due.

Key documents

Key documents