Mar 24, 2022

Aged care workers struggling to make ends meet as cost of living rises

Aged care workers are struggling to cover the basic costs of living, according to new research, making it difficult for providers to employ enough staff and hold onto them, and ultimately eroding the quality of care being delivered to older Australians.

New research by the Australian Aged Care Collaboration, a collection of six peak bodies that represent about 70% of Australia’s aged care services, shows aged care workers can barely make ends meet.

The research

Their study compared aged care wages with basic living expenses, and they looked at the funds remaining. They modelled the results for three different household types.

For wages, the study looked at a certificate III qualified personal care worker employed at roughly the award rate, who works a full 38-hour week.

The weekly earnings they used for a full-time aged care worker was $773 per week after tax.

For costs, the researchers used data on food, drink, transport, health, childcare and education costs from the 2015-16 ABS Household Expenditure Survey, adjusted for inflation.

The average weekly transport costs the researchers used was $113 for a single person or $338 for a family. The average weekly cost of education or childcare, after subsidies, was $122 each week. And the average cost of weekly groceries ranged from $135 for a single person to $361 for a family.

The researchers estimated average weekly rent was $425 for a unit or $571 for a house.

Telecommunications, utilities and incidental household expenses were not included in the study.

The analysis shows that after expenses:

A single aged care worker has $112 per week leftover after basic expenses,
An aged care worker in a two-parent household with two children has $17 per week left over after basic expenses, and
For an aged care worker in a single-parent household, costs exceed income by $148 each week – they can not make ends meet. Single-parent aged care workers would have to work extra hours, late nights or weekends to keep pace with expenses, or rely on government benefits.

Low wages mean aged care workers are suffering rental stress

Given the internationally accepted benchmark that rent should not exceed 30% of a household budget in order to be affordable, each of the households modelled was considered to be “under stress”.

“Our calculations suggest that aged care workers in single households are likely to be in serious financial stress with little or no savings buffer, while aged care workers in coupled households are likely to be financially dependent on a partner's income,” the report states.

Low wages contributing to workforce exodus

The results explain why some aged care providers have been forced to offer staff housing simply to attract enough workers.

The findings also explain, at least in part, why the aged care sector is facing major workforce shortages.

Sean Rooney, chief executive of Leading Age Services Australia (LASA), told HelloCare, the Royal Commission found aged care workers were already feeling “undervalued and underpaid” and the pandemic has compounded the “pressure” of staff who have been doing “a great job” keeping resident safe in “really challenging circumstances”.

He said the sector has been “relying” on those workers, but many are feeling “fatigue and frustration” and are deciding to leave the sector.

It’s “not good” he said. “Not only do we need them, we need more staff.”

He said the staff leaving includes senior staff with more than a decade’s worth of experience.

They “found that things are getting too hard, and … cite the fact that the work is very challenging and difficult, albeit rewarding, but challenging and difficult relative to the amount of money they're being paid.”

The 2021 State of the Sector Aged Care Workforce Insights report revealed low pay is a leading cause of work dissatisfaction among aged care workers.

Low pay is also the most common reason workers leave the sector.

The AACC is calling on all political parties and candidates to agree to a government-funded supplement for providers to spend on increasing wages and workforce retention, a commitment to funding the recommendations of the Fair Work Commission Work Value Case, and a commitment to an allied health needs assessment and funding model by July 2024.

Higher wages elsewhere

Aged care providers are competing for staff with the National Disability Insurance Scheme (NDIS), the health system, and the community sector, which are each funded to offer higher pay to workers.

Aged care workers can also earn more working in the hospitality or retail sectors.

Rooney said, “When you look at what the median hourly rates are in retail or hospitality or NDIS or the acute [care] sector, you can see why people would go, ‘I enjoy my job and I really like caring for others but when you look at the inequity between other roles and the rising cost of living, it’s just making it untenable.’”

“Aged care workers deserve better pay to keep up with cost-of-living pressures,” the AACC report states.

The Royal Commission recommended an increase in award wages for aged care workers, but to date the government has not committed to funding higher wages

Aged care workers deserve respect and support

“Older Australians cannot get the best available support and care without respect and support for aged care workers,” the AACC report states.

The situation can’t be “ignored” any longer.

“We need to fix this, and we need to fix it as a priority,” said Rooney.

If we don’t address low wages in aged care, “We'll continue to see an exodus of staff from our sector at a time when we can least afford it.”