Pay rise to be fully funded

In a pre-budget announcement – and in line with the Fair Work Commission’s ruling – the federal government has confirmed today the 15 per cent pay rise for aged care workers will be fully funded, representing an additional $11 billion for the sector over four years.

“This pay rise is history making,” said Minister for Health and Aged Care Mark Butler in a statement. “The Albanese Government’s funding will help restore dignity to older people, just as the royal commission asked us to.”

He added: “Our commitment is long overdue recognition of the skilled work our workers deliver day in, day out.”

In the same statement, Minister for Aged Care Anika Wells said: “This record $11.3 billion investment is a historic and deserved pay rise for a workforce that has been undervalued for too long.

“This wage decision will help more women and families to make ends meet and ensure that quality aged care workers are less likely to contemplate leaving the sector because of pay concerns.”

The fully funded pay rise also includes on-costs – such as superannuation, leave liabilities and workers compensation.

In response to the announcement, Tom Symondson – chief executive officer of provider peak the Aged & Community Care Providers Association – said in a statement: “This comes as a welcome relief for workers and aged care providers alike after a six-month campaign by ACCPA in seeking the government’s commitment to ensure the increase awarded by the Fair Work Commission last November is funded and paid in its entirety from July.”

Following an FWC interim decision last November to hike aged care workers’ pay by 15 per cent, the government initially announced this would be paid over two years – 10 per cent from 1 July this year, with the remaining 5 per cent to follow on 1 July 2024.

However, in February, the FWC insisted that the 15 per cent be paid in full from July.

“It was not going to work for aged care providers and their staff to have the increase paid in two parts over 12 months,” said Mr Symondson.

The pandemic and decades of under-funding had left the sector struggling to attract new staff, he said.

“We are delighted the government agrees with ACCPA that increased funding is required now. Without a much-needed pay increase, and support for providers to make sure it is paid on time and in full, we won’t be able to stem the exodus from our workforce.”

With demand for aged care workers set to double by 2050, Mr Symondson said: “We are grateful that 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.”

As a result of this boost to aged care wages:

• a registered nurse on a level 2.3 award wage will be paid an additional $196.08 a week (more than $10,000 a year)
• an enrolled nurse on a level 2 award wage will be paid an additional $145.54 a week (more than $7,500 a year)
• an assistant in nursing on a level 3 award wage will be paid an additional $136.68 a week (more than $7,100 a year)
• 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 (more than $7,300 a year)
• a recreational activity officer on a level 3 (aged care award) will be paid an additional $139.54 a week (more than $7,200 a year)
• a staff member with a Certificate III qualification moves from earning only $940 per week to $1,082.

For residential aged care, the AN-ACC price will be increased from 1 July 2023 to $243.10 based on advice from the Independent Health and Aged Care Pricing Authority – this will cover the wage rises for direct care staff including lifestyle workers.

A new hotelling supplement of $10.80 per resident per day will also be established, which includes funding to cover the pay rise for head chefs and cooks.

While the pay rise will benefit 250,000 workers, hundreds of thousands more have been left out of the deal.

Speaking to AAA, Yvonne Timson – CEO of Western Australian aged care provider Community Vision – said: “Support workers in this sector are the most deserving of the increase and with another interest rate rise just announced, it is even more critical so we can continue to both retain and attract workers in the sector.” 

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