More than $2 billion has been added to residential aged care funding to cover an award wage increase providers have been paying workers since July.
The award wage hike of 5.75 per cent – which was decided by the Fair Work Commission through its annual wage review in June and is on top of the 15 per cent awarded through the aged care work value case – will be funded through the Australian National Aged Care Classification.
Representing a $2.194 billion boost for the aged care sector, the measure lifts the AN-ACC starting price from $243.10 to $253.82 per resident from 1 December 2023.
In a statement, Minister for Aged Care Anika Wells said the investment meant “every aged care home will have the funding to make this wage a reality for a deserving care workforce – a workforce that has been undervalued for far too long.”
Included in the AN-ACC cash boost, is an additional $21.5 million set aside for 24/7 registered nurse supplement funding, also effective 1 December.
The increase also accounts for back pay funding for the 1 July to 30 November period. It is for all eligible staff – registered nurses, enrolled nurses, assistants in nursing, personal care workers and recreational activities officers.
Provider peak body Aged & Community Care Providers Association welcomed the AN-ACC increase. “We are delighted the government agrees with ACCPA that increased funding is required now and welcome Minister Anika Wells’ commitment to ensuring providers can continue to operate for the benefit of older Australians in these very challenging times,” said the national peak’s chief executive officer Tom Symondson.
“It’s very clear from the government’s own data that the sector’s financial sustainability is at risk,” added Mr Symondson. “Without support to fund the 5.75 per cent increase – which providers passed on in full to their hard-working staff members back in July – many providers would struggle to make ends meet.”
Also, from 2024, the annual price for AN-ACC will be announced in August and take effect from 1 October.
“This decision is vital to residential aged care providers,” said Mr Symondson, “because it offers greater certainty in the government funding they will receive each year and will resolve the current issue where budgets are set before wage increases are announced, meaning they often do not match.”
Leave liability grant
Meanwhile, the government is encouraging providers to apply for a grant to contribute toward higher leave entitlements for workers who have had their wages increased as a result of the Aged Care Work Value case.
However – amounting to $130.9 million – the Historical Leave Liability Grant Opportunity covers only half of the cost of paying the leave entitlements of those workers.
The grants apply to services that provide:
- residential aged care
- home care packages
- Commonwealth home support
- transition care
- short-term restorative care
- multi-purpose services
- national Aboriginal and Torres Strait Islander flexible aged care.
For more information, providers can access the draft Grant Opportunity Guidelines and FAQs on the government’s grant funding website, GrantConnect.
Comment on the story below. Follow Australian Ageing Agenda on LinkedIn and Facebook, sign up to our twice-weekly newsletter and subscribe to AAA magazine for the complete aged care picture.
What about funding the same wage increase for Home Care Package Providers who pay staff under the same award? Operators have been out of pocket since July 1st as well. This missing 5.75% issue has been overlooked by the industry bodies and the Minister at the moment.