The Albanese Government has announced a new $3.8 billion investment aimed at increasing wages for aged care workers, with the goal of improving care for older Australians. The funding, which will be rolled out over the next four years, is set to benefit approximately 340,000 workers in both residential and home care sectors.
This initiative follows the Fair Work Commission’s (FWC) Aged Care Work Value Case Stage 3 decision and builds on the government’s previous $11.3 billion commitment in 2023, which funded a 15% award wage increase. Aged care workers are expected to receive these pay rises from 1 January 2025, with additional increases from 1 October 2025.
Aiming for Better Aged Care
Minister for Aged Care, Anika Wells, stressed the importance of this investment for both the workers and the aged care sector as a whole. “Through this additional funding, we are supporting a sustainable sector delivering high-quality care that older people can access when and where they need it,” she said. “We are funding the Fair Work Commission’s Aged Care Work Value Case Stage 3 decision, which will see award wage increases for many workers in aged care. This will in turn support recruitment and retention of aged care workers, and the delivery of well‑staffed and consistent high-quality care for older people in Australia.”
These wage increases will apply to a broad range of roles, including personal care workers, home care workers, assistants in nursing, recreational activities officers, and other essential support staff, such as cleaners, drivers, and maintenance workers. By increasing wages, the government hopes to address staffing shortages and ensure a more stable, well-staffed aged care workforce.
Supporting Providers Amid Growing Costs
The government’s plan includes an increase in the Australian National Aged Care Classification (AN-ACC) price to $280.01 per day, beginning on 1 October 2024. This 13% increase in average daily funding is intended to help providers manage rising costs and meet the new requirement of 215 care minutes per resident per day.
Providers in regional and rural areas, which often face higher care costs, will particularly benefit from changes to AN-ACC funding categories. Additionally, the hotelling supplement, which helps providers cover daily living costs for residents, will see a significant increase. From 20 September 2024, it will rise from $11.24 to $12.55 per resident per day, with a further increase of $1.89 on 1 July 2025.
Minister Wells emphasised the broader impact of these changes: “Through more funding for aged care homes, better wages for staff, and improved care for residents, the Albanese Government is continuing to invest in a safer, more equitable aged care system.”
Home Care and CHSP Providers to Benefit
The government is also allocating $400 million over four years to increase the Commonwealth portion of the Home Care Packages (HCP) Program, ensuring that home care providers can pass on wage increases to their staff without reducing services. Commonwealth Home Support Programme (CHSP) providers will also have access to additional funds through a grant opportunity, allowing them to offer pay increases to eligible workers.
I am concerned regarding where the funding is coming from for the pay rises. Gvt money is usually in the form of increased taxation and borrowing, which the population with pay for. Also I understand that some of the pay rises are in the private, not state sector. Am I correct that the general population will be expected to subsidise private business.
Obviously I may have misunderstood what is proposed, life in general is always more nuanced.