Some principals are warning of a new wave of inequality after the Government announced plans to scrap school donations for some schools - but not all.
The 2019 Budget included more than $75 million a year to pay $150 per child to schools in deciles 1 to 7 if they agreed not to ask families for donations.
However, this does not apply to schools categorised as being in some of the richest neighbourhoods.
One principal from a decile 9 school in Rotorua told the Herald the change meant they would be missing out on almost $80,000 when they were already struggling to pay their electricity bills.
Lynmore School principal Lorraine Taylor said the Government should have reviewed its decile system before making this announcement.
"The only reason we are classed as decile 9 is because of the relatively expensive properties around us, but that doesn't mean we don't have kids from disadvantaged families who can't pay that donation."
Taylor said the primary school asks parents for a donation of $100 for the first child and $75 for siblings which is well below the Government's $150 per pupil.
Of the 650 kids enrolled at the school, only 200 had parents who had paid the donation.
Under the Government scheme they would receive about $97,500 compared to roughly $20,000 which they currently receive in donations.
"It's devastating news because it will mean parents will take their kids elsewhere if they know they don't need to pay at schools a couple of deciles lower."
Lynmore School was the only primary school in Rotorua missing out on this funding, she said.
"This is extremely disappointing because there is a big difference between a decile 9 school in Rotorua compared to a decile 10 school in Auckland."
Tauranga's Oropi School principal Andrew King echoed Taylor's comments saying it was creating a new inequality within New Zealand public schools.
"It's assuming families who enrol in our school have no socio-economic disadvantages and that is simply not true."
Being a rural school came with many extra costs, King said, including mileage and paying a fortune for water treatment.
In the past eight years his school roll had jumped from 120 to 330 students, he said.
"This has meant a lot of extra costs for added infrastructure."
The school asked parents for $85 per student, King said, and about 60 per cent were able to pay that.
National's education spokeswoman Nikki Kaye has slammed Labour for "scaling back on another promise" saying there were many holes in the school donations policy.
"While school donations are currently voluntary in New Zealand, Labour promised all schools would be incentivised to end school donations.
"We know there are a lot of parents who thought this would mean no donations, but actually the $150 payment will see a number of schools still choosing to ask for donations."
There were a number of upset schools who were tens of thousands of dollars out of pocket, Kaye said.
"The reality is there are many disadvantaged families in schools in decile 7, 8 and 9."
Kaye said National had proposed scrapping the decile system due to huge inequities and discrimination.
"Labour has stalled this proposal, and now you have some schools in higher deciles who are being hit twice, with inequity from the stalled policy and being excluded from the donation payments."
In a statement to the Herald, Education Minister Chris Hipkins said work was underway with to develop an equity index to replace the decile system, with a view to it being tested and available to be implemented from 2021 or 2022.
"This Budget gives schools a 1.8 per cent increase in their ops [operational] grant which, combined with the funding for the donations replacement scheme, makes it the biggest increase in ops grant funding in a decade," he said.
"We will monitor the donations replacement scheme once implemented, and consider extending it once it is up and running."
Hipkins said it was "concerning to hear of a school struggling to pay an electric bill", and asked the school's Board of Trustees to contact the Ministry of Education.
He also noted that state-integrated schools are eligible to opt into the donations replacement scheme.