Jun 20, 2023

New advice suggests Government shouldn’t fund full 15% pay rise for workers

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Aged Care Minister, Anika Wells (pictured), said providers would be ­legally obliged to pay the award increases to all eligible staff. [Source: Twitter]

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.

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  1. How can a story be printed with such a distortion of the facts!

    The government has funded an increase of ANACC the funding tool for residential care of 11.5%. This is a bigger number than the actual wage increase and actually does cover the full pay rate increase.

  2. So as was evident when the news was first announced in essence the Commonwealth will use tax payers money to fund an increase if wages for aged care providers who have not done the right thing by their staff, and clearly have not valued them. And the organisations who have valued and supported their staff, by paying them in excess of the base awards, are being disadvantaged. Well that gives a whole new meaning to fairness and equity. In fact, a conclusion could be drawn that the providers who the industry does not want in the business, and whom consumers do not want in the business are going to be sustained to continue their practices and ideology. It is extraordinary that the government, irrespective of their political persuasion, talk about improving the industry, holding the poor performers to account and then walk this line. Little wonder the disillusionment amongst the majority of the people who work in this industry.

  3. In aged care “already paid above the award” still means paid significantly less than those on public health systems awards and often with far more responsibility and workload. Aged care is complex and those looking after our elders should not be treated as the poor cousins of nursing. To pay nurses in aged care any less than public sector nurses is to show a lack of respect for our older Australians receiving their care.
    Good nurses will leave for other work where they feel valued and respected.
    It’s time to close this gap! Properly. And 15% is nowhere near enough to make this fair work !!!

    And then there’s the carers, kitchen folk, cleaners, activities… that are all vital to good care for our older family members – and paid pittance. Time to value care work fairly and properly, and value our mums, dads, grandparents too as we do so…

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