May 04, 2023

‘Historic’ financial pledge to aged care confirmed in Federal Budget

Jim Chalmers, AAp
Treasurer Jim Chalmers (pictured) hopes this Budget will help attract staff to the sector and retain those already working in it. [Source: AAP / Bianca De Marchi]

The Federal Government has confirmed it will commit a massive $11.3 billion in next week’s Budget to continue reforming the sector, a ‘historic’ pledge that will help fund the awaited 15% pay rise for aged care workers.

This money will see 250,000 nurses and aged care workers receive the most significant pay increase in next week’s Budget.

Changes to aged care wages:

  • A Registered Nurse (RN) on a level 2.3 award wage will be paid an additional $196.08 a week
  • An Enrolled Nurse (EN) on a level 2 award wage will be paid an additional $145.54 a week 
  • An Assistant in Nursing (AIN) on a level 3 award wage will be paid an additional $136.68 a week
  • A personal care worker on a level 4 aged care award or a home care worker on a level 3.1 SCHADS award will be paid an additional $141.10 a week

The wage increase, recommended by the Fair Work Commission, will begin in July and aims to attract about 10,000 staff into a career in aged care to allow providers to achieve the 24/7 Registered Nurses (RNs) mandate in all residential facilities – also set to come into play July 1.

Aged Care Minister, Anika Wells, called the Budget announcement ‘historic’ for aged care workers. This sentiment was shared by Council on the Ageing (COTA) Chief Executive Officer (CEO), Patricia Sparrow, who said raising wages in aged care is essential to achieving better outcomes in the system.

“There’s no doubt the aged care workforce has been undervalued for far too long. This is a fantastic announcement and one which will make a marked difference to the sectors’ ability to attract and retain quality aged care workers in Australia.

“This funding boost will, among many things, help ease the workforce pressures and ensure we have nurses available 24/7, which was a key recommendation of the Royal Commission into Aged Care and something older Australians have long advocated for.”

While some providers have begun closing their doors as they doubt their resources allow them to comply with the July mandates, Prime Minister, Anthony Albanese, defended the 24/7 Nursing initiative as recommended by the Aged Care Quality and Safety Commission.

Initially, the Federal Government planned to roll out the pay increase over 12 months with 10% to be awarded in 2023 and the remaining 5% in 2024 but along with the Fair Work Commission, the Government saw more immediate action was needed.

The Aged & Community Care Providers Association (ACCPA) and other health and aged care unions pushed for the full pay increase to be rolled out in one hit, something CEO, Tom Symondson, is relieved about.

“Without a much needed pay increase, and support for providers to make sure it is paid to their staff on time and in full, we won’t be able to stem the exodus from our workforce,” he said. 

“We know that the demand for workers in aged care will double by 2050, so we are grateful the Government has recognised that we need to do all we can now to reward aged care staff for the important work they do every day.”

The Government has also been trying to find other solutions to help reduce workforce shortages, often receiving aid from the Pacific Australia Labour Migration (PALM) scheme.

But last week, Home Affairs Minister, Clare O’Neil, announced changes to the migration program after admitting the crisis couldn’t be solved by Australians alone.

One of the announced changes was to cap the work rights of international students to 48 hours a week, which aged care providers said would devastate the already strained sector.

The government is also boosting access to education and training programs to help relieve workforce pressures.

The Federal Budget will be released Tuesday, May 9.

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  1. That is a great increase. However, it is against the Modern and Nurses Award. Our staff are already paid between 9% and 42% above the rate stipulated in the Awards which are the reference point. And I would suggest that a significant proportion of the industry, especially the NFP sector are in a similar situation with their EBAs. So in reality those staff already paid 15%, or more, above the reference point will receive 0% in additional funding from the Commonwealth. And to compound that challenge, providers will either have to explain this situation to their staff, and provide nothing, or fund an increase at some level from their own resources and funds. Given the 70% of operators running at a cash loss I cannot see the latter being a common choice. So, in essence the Commonwealth is going to support and fund those providers who have in fact underpaid their staff for a prolonged period and those who have paid their staff well will just have to suck it up. That does not seem to me to be either equitable or fair.

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