Aug 12, 2022

Aged care workers affected by Victorian councils scrapping services

As Victorian councils scrap their in home aged care services and older consumers are left without support, aged care workers are also being affected by the service closure decisions.

Aged care workers that previously were employed by councils are reportedly being asked to take a pay cut of more than $10 an hour to move over to private aged care providers.

Meanwhile, those already working for private providers are facing even larger workforce shortages and higher workloads with all the new clients looking for home care services.

Ratepayers Victoria, an advocacy group for Victorian ratepayers, predicts as many as 80% of Victoria’s 79 councils will discontinue their in home care programs due to a Federal Government change from block funding to consumer directed care funding.

Is it estimated that around 15 councils already have ended their aged care services, although some of these were in regional areas where the transition went more smoothly due to stronger relationships between councils and local providers.

Under the block funding, councils received funds based on the number of residents in their area regardless of how many people the service was actually delivered to. 

Under the new funding model, the funds are allocated to each person receiving aged care services to spend how they want rather than to the organisation delivering the services.

The Government Health Department has said that the issues currently being seen in Victoria around in home support have not been raised in other States in Australia.

However, Aged & Community Care Providers Association (ACCPA), the peak industry body for aged care providers, said the feedback they have been getting since the previous Government announced the new design of the Support at Home program nine months ago is that many council providers of these services are considering exiting the sector as it will not be cost effective for them – and this problem won’t just be in Victoria.

ACCPA confirmed that the new changes in funding will and has had widespread consequences.

General Manager of Policy and Advocacy at ACCPA, Tim Hicks, said “many” providers are considering leaving the sector.

“This change is particularly affecting service providers in Victoria where historic funding arrangements for these services have remained in place,” Mr Hicks said.

Mr Hicks said while aged care workers employed by councils should not face issues in finding new work, other providers won’t be able to offer the same rates as councils unless there is a “strong outcome and accompanying funding” from the current Fair Work Commission Work Value Case

Ratepayers Victoria has been vocal on the issue as more and more stories emerge of the gap in services caused by councils ending their programs.

Vice President of Ratepayers Victoria, Dean Hurlston, said the pay discrepancy for workers is one of the biggest workforce issues with the transition away from council services.

“Traditionally aged care support workers are part-time, and are middle to older aged people themselves, that have been used to around $34-35 an hour plus allowances,” said Mr Hurlston.

“What this does is it makes it difficult for many of [these aged care workers] to continue and for many of them that might have considered retiring or going onto another role, it just gives them incentive to not transfer across.”

With workers not incentivised to move across to private providers, there is a chance that home care providers will not have the staff numbers to cover the new clients transitioning over.

“We know the aged care sector in all forms is already under immense pressure from a workforce point of view, the real concern we have here is that this workforce is the workforce that is keeping people in their homes and living independent lives,” explained Mr Hurlston.

“So if we have a shortage in this, we’re going to place more pressure on aged care homes and aged care facilities that don’t have resources for an influx.

Mr Hurlston said Ratepayers Victoria was “disgusted” that councils were making the decision to stop providing aged care services.

“Many councils have been making a profit off the grants that have been given to them annually,” he said.

“Now that they can’t and it has to be a cost-neutral service or it’s going to cost them in administering the service, we’re really disappointed and outraged that councils have seen fit to throw elderly residents out and disband their service teams because it’s going to cost money.”

He called on the State Government to work with councils that were still running aged care services to find a State-based model that would allow the services to continue, and possibly expand to the council areas that have discontinued programs.

How do you think the Victorian councils’ decisions will affect the workforce? And do you believe the issue in Victoria could start appearing in other States and Territories? Tell us in the comments below.

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  1. This is another example of what a mess our health care system is currently in.
    As a Private Provider we are well aware how much Councils pay their aged care staff. We pay our staff above award and provide extensive ongoing training, education & support.
    A stated in the article, councils can pay higher wages; they are block funded by the Govt. to provide X number of hours of services to Clients. (Shopping, Personal Care, Transport, Gardening etc). As stated, CHSP funding is a grant.
    WAGES: At $35+/hr (F/T or P/T, not casual!) let me put this in perspective, a DIV 1 RN in General Practice is paid approx. $36-40/hr, Div 2 EN $29-31 & a receptionist earns approx. $25-27/hr.
    So, with the upcoming fair work review, where they are talking an increase of 25%, which would be unrealistic, but if they achieve even 10% you will see PCWs earning in the vicinity of $40/hr. Oh and being they are working for the Council, they also access to tax free income of approx. $18K/per year.
    Why are councils funded at a level that they can afford to pay such high wages (compared to the industry awards or standards) to provide services for people, whose needs, in most cases are lower than Level 1 HCP?
    If a Private Home Care provider paid this level of wages, the client service costs could be at least $90+/hr, could you imagine the outcry! We have far more accountability due to governance, managing client’s funds, reporting monthly, accreditation, ongoing reviews etc.
    We have advised some Clients not to accept their package (especially L1) and remain with Council services as they would be financially worse off.
    We welcome the changes, there needs to be one Govt. system for all Home Care services, seriously it’s not rocket science! Should councils close their services, so be it, there are plenty of private providers who will be able to take up these clients and offer jobs, yes at a lower rate, but a realistic one.
    There have been so many knee jerk reactions, quick fixes, that’s why we are where we are in aged care & health.

  2. Good work for putting this out there in the way you have! It’s the government’s duty of care to the ageing population!


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