Care providers call on Morrison government to fund aged care worker pay rises

Aged care providers say the federal government must fund new pay rises for carers.

Leading Age Services Australia CEO Sean Rooney at Parliament House. Picture: Gary Ramage.

Aged-care operators say the Morrison government must stump up an extra $250m-$300m a year to fund the 3 per cent pay rise of care workers or risk compromising the care of vulnerable older Australians.

They have written to aged-care ministers Greg Hunt and Richard Colbeck seeking clarification that the 2.5 per cent pay rise granted by the Fair Work Commission this month, and the 0.5 per cent superannuation increase, both starting on July 1, will be covered in the annual indexation payments applied to aged-care subsidies.

Sean Rooney, speaking on behalf of the Australian Aged Care Collaboration, a coalition of provider advocates, said 70 per cent of nursing homes were already operating at a loss before any future pay rises to staff.

“The additional 3 per cent will be a significant impost. Unless the government rolls the full amount into its indexation, we will be under even more financial pressure,” he said. “We simply aren’t being resourced and enabled to deliver what those in our care need and deserve. Counsel assisting the aged-care royal commission said providers are being placed in an impossible situation of having to choose between financial viability and providing the minimum standard of care to support residents.”

Aged care was the centrepiece of the government’s May budget, with a $17.7bn commitment that addressed some of the recommendations of the royal commission. It included an extra $10 per resident per day on nursing home residents costing more than $3bn over the forward estimates. But this funding is for improving care and nutrition, as per the commission’s recommendation, not wages.

The budget also provided 80,000 new home care places over the next two years.

“The $17.7bn sets up the system by addressing some of the present issues, but it doesn’t really cover what the sector will cost into the future,” Mr Rooney said.

Workforce issues present a particular problem, with existing workers leaving aged care for better-paid service sectors such as hospitals, with no international workers available to fill the breach. And on the horizon is another Fair Work Commission case brought by the carers’ unions that calls for pay rises of up to 25 per cent to reflect the true value of their work.

“The wages costs will build and build, and will come at a time future governments will be starting to consider post-Covid budget repair. This will be a real crunch,” Mr Rooney said.

A spokesperson for the federal Health Department said the aged-care sector received “a record funding increase … only weeks ago”. “All up, the investment has increased by $17.7bn, with specific increases to support the financial position and improve the quality of care for residents in aged-care facilities.”