Aged care providers urge two year pay delay

Aged care providers claim the timing of the $17.7 billion extra funding in the federal budget limit their capacity to fund pay rises for two years.

Aged care providers have urged the Fair Work Commission not to grant significant increases in minimum and award wages in July, claiming the timing of the $17.7bn extra funding announced in last week’s federal budget limited their capacity to fund pay rises for two years.

In a post-budget submission to the commission’s annual minimum wage review, Leading Age Services Australia said the “historic” budget package “should ­ultimately transform the aged care sector in a way that allows staff to be paid more”.

“This transformation, however, is unlikely to occur for another two years,” the submission says. “It would be incorrect to ­assume that this gives aged care providers the capacity to deliver significant wage increases in the 2021-22 financial year.”

The association said the Morrison government had indicated it did not accept the aged care royal commission’s recommendation to link subsidy indexation to award wage changes.

As a result, the current formula would continue to be applied to calculate the indexation amount for aged care funding subsidies. The association estimated that the likely indexation amount for aged care funding subsidies in July 2021 would be an increase of about 1 per cent.”

Health Services Union national president Gerard Hayes said the submission by the providers “highlights the gaping wages hole in the middle of the government’s aged care policy”.

“All of the rhetoric around increased care and improved standards is entirely hollow until the workforce have job security and decent wages,” he said.