New advice from the Independent Health and Aged Care Pricing Authority (IHACPA) has left out one-in-four aged care nurses in its calculation of the Fair Work Commission’s (FWC) 15% pay rise for aged care workers.
Since it assumed the 15% pay rise affected a smaller pool of workers, the Government has been directed by IHACPA to fund only 11.5% of the pay rise for 76% of eligible nurses in aged care as it is assumed 23% of those nurses would not receive any pay rise because they were already paid above the award.
The remaining pay rise funds would be given to employers in the hope it will be passed on to wage increases for workers.
The advice has sparked concerns about transparency from the Government and that aged care providers will have to cover the pay rise out of pocket despite reports that providers are continually operating at a loss.
“In cases where nurses are earning significantly more than the award rates, it is often because they work in areas that are difficult to staff, such as regional and rural locations but they have been discarded from the costing advice,” Aged Care Industry Association Chief Executive, Peter Hoppo, told The Australian.
The concern comes after a new report by aged care accountancy firm StewartBrown found financial problems continue to plague the sector, with the latest data showing the sector was facing a loss of more than $850 million.
But providers will see more funds allocated to them next month when the total per-resident funding per day would rise an estimated 17%, giving providers ample funds to pass on the 15% pay rise.
When the 15% pay rise was announced, health and aged care worker unions raised concerns that some aged care providers would try to “short-change” nurses and aged care workers by not passing-on full wage increases.
In February, the Australian Nursing and Midwifery Federation (ANMF) and the United Workers Union (UWU) reported that some members are claiming providers are rushing to lock them into new Enterprise Agreements (EA) – offering wage increases that won’t pass on the full amount of additional funding allocated to cover a 15% wage increase for aged care workers.
Aged Care Minister, Anika Wells, said providers would be legally obliged to pay the award increases to all eligible staff, even those on a higher award wage, and must pass on “all funding earmarked for wages to their workers”.
“We will require providers to attest that they are passing on the Government’s investment in wages to workers.”
This advice follows FWC’s decision earlier this month to grant a 5.75% increase to all minimum award wages effective July 1, 2023, meaning the minimum wages of workers affected by the 15% pay rise will also increase.
The IHACPA will provide annual residential aged care pricing advice to the Commonwealth Government, commencing July 1, for each coming financial year.