Aged care employers have backed the Albanese government’s proposal to stagger pay rises over two years due to fear of closures if the sector is forced to pay unfunded increases, clashing with unions who are demanding the full rise by July 1.

Treasurer Jim Chalmers has promised a multibillion-dollar funding allocation in this week’s budget for the aged care pay rise, as well as a yet-to-be-determined wage increase for childhood educators as part of their multi-employer bargaining.