Crisis as workers can’t keep up with rising cost of living

Some Aussie workers can’t even cover basic bills and are being left $148 in debt each week as they face ongoing serious financial stress.

Aussie aged care workers are falling into debt or are left with less than $20 a week after paying for essentials due to the skyrocketing cost of living.

A new report showed the wages in the aged care sector have failed to keep up with the cost of living and those in single-parent household can’t afford basic essentials, with their weekly costs leaving them short by $148 each week.

“An aged care worker in a single-parent household would not be able to cover even basic expenses without working extra hours, working late nights or weekends, and relying on additional government benefits,” found the report from The Australian Aged Care Collaboration (AACC), which consists of six aged care industry bodies.

Even an aged care worker in a two-parent household with two children has just $17 per week left after paying for rent, transport, groceries and healthcare.

A single aged care worker with no partner or children has $112 per week in disposable income after paying for essentials.

Aged care workers are being left in debt or with little money after paying bills as their wages fail to keep up with the skyrocketing cost of living. Picture: iStock

But the report cautioned the analysis only examined basic weekly living costs and did not factor in expenses such as telephone, electricity and gas bills as well as other household debts.

“Aged care workers in single households are likely to be in serious financial stress with little or no savings buffer, while aged care workers in coupled household are likely to be financially dependent on a partner’s income,” the report said.

Shockingly, the report found that while the aged care workforce is skilled, an overall shortage in staff in Australia means a support worker can earn more in hospitality or retail.

Around 70 per cent of aged care workers are qualified with a certificate three, yet after tax they take home just $770 per week.

The report found Australia’s average weekly rent is $425 per week for a unit or $571 per week for a house, while weekly groceries range from $135 for a single person to $361 for a family.

Add to that the average weekly transport costs are $113 for a single person or $338 for a family, and education or childcare after subsidies are up to $122 each week – this means aged care workers can’t keep up with the huge increase in the cost of living, the report warned.

A workforce crisis is looming in the aged care industry. Picture: iStock

Consumer prices rose 3.5 per cent in 2021, while average wages increased by just 2.3 per cent.

Philip Lowe, governor of the Reserve Bank of Australia, has warned Australians they are set to take a real pay cut of 1.5 per cent this year because wage growth won’t meet inflation.

A survey released earlier this month revealed that one in five aged care workers plan to quit their jobs in the next year after feeling hopeless, exhausted and “demoralised” in the wake of the Covid crisis.

The cost of living crunch helps to go further to explain why so many workers are leaving the sector, according to the AACC report.

“Without action many more will follow, worsening the workforce crisis facing the sector,” the report warned.

Low pay is a leading cause of work dissatisfaction among aged care workers and the most common reason why workers leave the sector, the report added.

The Royal Commission into Aged Care has recommended a pay rise for workers and the Fair Work Commission is currently investigating whether wages should be increased, but it is not expected to make a decision until the middle of the year.

One in five workers plan to quit their aged care jobs in the next year. Picture: iStock

In the lead-up to the federal election, the AACC has called on the major parties to commit to more funding for the sector, including a federal guarantee to fund wage increases.

It also wants more money to fund Covid-19 prevention measures and to commit to an allied health funding model.

The Liberals have said they will leave the wage issue to the Fair Work Commission, while Labor supports a wage increase but haven’t said by how much.