Aged care funding to save homes from going under, provider says

The new funding boost in aged care to pay 15 per cent higher wages to nurses and care workers will save some nursing homes from going under, Catholic Health Australia chief executive Pat Garcia says.

Unions want mandated aged care pay rises.

New aged care funding supporting 15 per cent higher wages for 250,000 care staff was a “game changer” for the sector and would likely keep sinking nursing homes afloat, a key provider voice has said.

Catholic Health Australia chief executive Pat Garcia said the government’s $11.3bn additional funding announcement for aged care over the next four years was “a lifeline being thrown to a drowning sector.”

“A number of aged care providers I spoke to today are reassessing the once questionable viability of facilities in light of the new numbers,” Mr Garcia said.

Under the new AN-ACC funding model being rolled out in aged care, government support to providers will increase nearly 18 per cent from $206.80 to $243.10 per resident per day, which includes the 15 per cent pay rise for workers.

Catholic Health Australia chief executive Pat Garcia said the funding increase was “a game changer for aged care.”

“Homes they were planning on shutting may now be able to stay open. We’ll need to see the finer detail but, at first look, it‘s that significant.”

“With 70 per cent of aged care homes running at a loss, this funding boost will save a range of aged care facilities from going to the wall,” Mr Garcia said.

The government’s confirmation on Wednesday that it would provide $11.3bn over four years to fund the Fair Work Commission interim decision to award a 15 per cent pay rise to 250,000 nurses and other care workers has prompted a wave of support from seniors advocates, unions and providers.

But unions say the Albanese government must mandate that aged-care operators pass on the full 15 per cent pay rise from July 1.

Australian Nursing and Midwifery Federation federal secretary Annie Butler said unless the Albanese government imposed “enforceable requirements” on the funding there was a risk it may not find its way to the nurses and care staff.

ANMF Federal Secretary, Annie Butler. Picture: Kym Smith

“Our big concern is that many nursing home operators won’t pass on the money intended for workers,” Ms Butler said. “We have good reason to be concerned because this is what has happened for the last 30 years when consecutive governments have given private aged care operators almost $2.5 billion, specifically to boost wages.

“There’s been a long history of lost wages and workers have been consistently let down. The government cannot give it to providers on trust. Trust is not enough,” Ms Butler said.

Aged care minister Anika Wells said individual providers would face “the public pressure of transparency” over increasing their pay rates under new rules that kick in from January next year requiring providers to publish pay data in quarterly financial reports.

“It is now the law to pay 15 per cent above the award,” Ms Wells said.

Peak provider advocacy group Aged & Community Care Providers Association, along with providers Anglicare Australia, Baptist Care Australia, Catholic Health Australia and UnitingCare Australia all back the rise, calling on all providers to pledge to pass on the increase in full.

“We know demand for workers in aged care will double by 2050, so we are grateful 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,” ACCPA chief executive Tom Symondson said.

United Workers Union aged care director Carolyn Smith said the additional wage funding will go a long way to addressing systemic issues in aged care.

Patricia Sparrow, chief executive of COTA Australia. Picture: Supplied

“For too long understaffed aged care workers have been on the front line providing care to some of Australia’s most vulnerable citizens, without proper recognition and on horrendously low pay,” Ms Smith said.

She noted the federal government had told providers to pass on the full pay rise, “no ifs or buts.”

“Providers have a very clear obligation to pass on the pay rise, which should flow to workers whether they are on the award or on enterprise agreements,” Ms Smith said. “(We) will be fighting to make sure providers are held accountable, and every last cent of this pay rise goes to workers, not pumping up bottom lines.”

Council on the Ageing chief executive Patricia Sparrow said raising wages in aged care was critical to driving better outcomes for older Australians.

“You can’t have a great aged care system if you’re not paying the people working in the system what they deserve,” Ms Sparrow said.

“The aged care workforce is essential to ensuring the health, wellbeing and dignity of tens of thousands of older Australians. Older people know that paying workers fairly for the job they do is crucial.”

Aged care provider HammondCare chief executive Mike Baird said “every dollar” from the new funding would go to his frontline aged care staff.

“Anyone that’s had someone in aged care knows the impact that our aged care workers have. Each day and night they change lives,” Mr Baird said.

“To me, what this announcement is about is our country saying to our age care workers that their work matters. It is very much deserved recognition for their commitment to helping vulnerable people in need,” he said.