Mixed reactions take the shine off the latest aged care pay rise decision

Last Friday capped off another big week for the aged care sector with the Fair Work Commission (FWC) approving additional pay rises for direct and indirect care workers. However, the disparity between the pay hikes has resulted in mixed reactions. 

Key points

• The FWC handed down its decision on Stage 3 of the Aged Care Work Value Case, announcing that direct care workers (excluding nurses on the Nurses Award) would receive a pay rise of up to 28%, inclusive of the interim 15% rise
• On average, personal care workers (PCWs), Assistants in Nursing (AINs) and healthcare workers (HCWs) under the Social, Community, Home Care and Disability Services Industry Award (SCHADS) Award will receive a 23% boost to their Award rate
• Indirect care workers, including those working in administration, laundry and food service were deemed to “not perform work of equivalent value” and most will receive just a 3% increase
• Indirect workers who interact with residents are the exception, meaning some will see their Award rate increase by almost 7%

Overall, there is a strong sense of optimism within the sector following the FWC’s decision. Direct care workers have been recognised for their efforts with ACCPA Chief Executive Officer Tom Symondson leading praising the news. 

“We’re delighted the Fair Work Commission has acknowledged the vital contribution aged care workers make to our community through the care they provide to older Australians. A key recommendation of the Aged Care Royal Commission was to raise the pay of aged care staff,” Mr Symdondson said.

However, like many within the sector, he acknowledged the disappointment thousands of other workers face after once again missing out on an equivalent pay rise. 

“There is an ever-widening chasm between what we pay some workers in aged care and what we pay others,” he said. 

“Without our laundry staff, kitchen staff, cleaners, gardeners, maintenance, and administrative staff our direct care workers couldn’t do what they do. They all work within the unique environment of aged care whether they are delivering services to older people in their own homes or in residential care.”

The Australia Institute’s Centre for Future Work said this is a vital step to fixing the undervaluation of aged care work, but labelled the exclusion of indirect care workers as a “lost opportunity” to support the lowest-paid workers. They also praised the introduction of a new classification structure that better reflects the value of work across the board.

Health Services Union (HSU), who lodged the Work Value Case in 2020, arguably expressed the most pride over the decision, and rightly so. HSU National President Gerard Hayrs said it was a historic improvement that will have a material impact on wages and lives.

“This is an historic improvement that will usher in a new era of decency and dignity in our aged care homes,” he said. 

“For the last decade aged care has been held together by the goodwill and commitment of a severely underpaid, insecurely employed workforce. Those workers have won wage justice.”

“These are life-changing improvements. They will allow the industry to retain workers which, as the Royal Commission noted, is absolutely essential to delivering continuity of care. When someone is dealing with a condition such as dementia, it is deeply reassuring for them and their family to see the same carer,” he added. 

Mr Hayes added that HSU will continue to push and fight for administration and maintenance staff to receive a wage increase.

Government must fund the decision

Positive financial gains over the past 12 months are not strong enough for providers to support the pay rise on their own, and leaders continue to call for the FWC decision to be fully funded by the Federal Government.

Mr Symondson said this would be in line with the Labor Party’s 2022 promise to fund all outcomes of the Work Value Case.

“We commend the Albanese Government for honouring its pre-election commitment and fully funding last year’s 15% award increase for direct care workers. We fully expect the Government to do the same with these increases in stage three and any further increases awarded by the Commission,” Mr Symondson said. 

“As the Government acknowledged in making that promise, our sector can only afford such increases for our valued workers with matching government funding.”

Catholic Health Australia (CHA) which represents more than 350 not-for-profit residential aged care homes, also urged for Government intervention to alleviate further financial stress on providers. 

CHA Aged Care Director Laura Haylen said providers can’t absorb the extra costs to fund further pay rises.

“The federal government must deliver on its commitment to fully fund these wage rises as soon as possible, including any leave entitlements. We believe that we can work together to ensure staff are paid as quickly as possible without diverting existing funds from quality care and support,” she said.

“With most aged care providers already running at a loss, they cannot afford to absorb these extra costs without government funding.”

The full summary of the Fair Work Commission’s Aged Care Work Value Case decision can be found on their website.