Stakeholders disappointed in Government’s aged care pay rise delay

A delay to the interim 15% award wage increase rollout has been criticised by unions and aged care stakeholders who believe the Government’s latest submission to phase in the increase is going to further harm the sector.

Last month, the Fair Work Commission approved the Government’s initial request for a 15% pay rise and it was hoped the increase for direct care workers would be passed on in early 2023.

But last Friday the Government lodged another submission stating the pay increase would be introduced over a 12-month period. 

As a result, direct care staff will receive a 10% pay rise from July 1, 2023 and a further 5% increase in July, 2024. There has been no talk on whether the desired 25% increase will be introduced later.

After championing the full 25% wage increase, Health Services Union (HSU) National President, Gerard Hayes, lashed out at the Government’s poorly timed decision. 

He said it shows there is no plan to prevent further damage to a workforce that needs to be better supported now.

“This is a devastating delay that will see the workforce crumble,” said Mr Hayes.

“The initial increase doesn’t come for more than six months and will be mostly eaten by inflation. To delay the subsequent five per cent until July 2024 will see the sector crumble.

“Three quarters of aged care workers have already indicated they will quit aged care in the next six months unless there is a serious pay rise.”

Mr Hayes said the delay tactic is a breach of trust for workers under immense pressure after putting their faith in the hands of the Government.

“The stage three tax cuts deliver billions in tax cuts to people who don’t need them, and the Government thinks that’s a promise worth keeping,” said Mr Hayes.

“Yet when a workforce of insecurely employed, underpaid women win a decent pay rise, it’s fine to breach their trust with delay tactics.

“Aged care workers will be furious with this plan, and I fear it will sever the last threads of goodwill.”

The latest FWC submission stated it’s not feasible to introduce the wage boost any earlier than July as the increase will likely be allocated through subsidised aged care placements.

Accountancy firm StewartBrown predicted the new wage rates will cost $1.9 billion.

“This timing will allow the Commonwealth [Government] to implement the proposed interim increase appropriately through its various aged care funding mechanisms,” read the statement.

Aged care stakeholders outline requests

Aged care industry stakeholders met with the Government last week, including The Aged & Community Care Providers Association (ACCPA), the Council on the Ageing (COTA), Health Services Union (HSU) and the United Workers Union (UWU).

ACCPA Chief Executive Officer (CEO), Tom Symondson, participated in the discussions, and while he thanked the Government for its ongoing commitment to fully funding the pay rise, he said the delayed rollout will not benefit an industry in crisis now.

“We are concerned that the pay rise is to be split into two parts and that workers will have to wait until 1 July 2023 before the first increase and a year later to get the second,” said Mr Symondson.

“We are experiencing a workforce crisis now and we need to be able to pass on pay rises to our staff as soon as possible to recognise their incredible contribution and to give them the confidence to remain in our sector.

“We expect to see further stages of the FWC work value case expected early next year to address the work of kitchen, laundry, recreation activities and administrative staff who were not included in the initial decision to award a 15 per cent pay increase.”

A joint statement outlining stakeholder requests was produced following the meetings, featuring an agreement on six key matters:

• The interim increase is fully funded by the Government, including on costs, and is applied to Award reliant employees and those covered by enterprise agreements
• It is passed on as soon as possible and is not phased in over time. The funding must also be provided to employers when the pay rise commences to ensure they can afford to pay the increased pay rates.
• Recreational Activities Officers and head chefs and head cooks should also receive the 15% interim increase alongside direct care workers
• There is transparency and accountability with respect to the payment process
• Stage 3 of the FWC proceedings – which includes expanding the eligibility criteria and discussing a full 25% wage increase – occurs as soon as possible
• The care and services provided to older Australians are not going to be negatively impacted as a result of increased costs 

One of the key stakeholders, Catholic Health Australia (CHA) expressed its confusion towards the Government after it slapped an 18-month timetable on the wage increase, one month after it was approved. 

CHA Aged Care Director, Jason Kara, pointed out the need to increase wages to support workers as cost-of-living expenses rise dramatically.

“Both the Royal Commission and the FWC have accepted aged care workers are underpaid and that this is a key reason we are experiencing a crisis in recruiting and retaining staff,” said Mr Kara.

“The government recently welcomed the Fair Work Commission’s interim pay decision as desperately needed and thoroughly deserved but now it has been delayed, we want to know why?”

“This is a really bitter pill for aged care workers to swallow right before Christmas and is a real disappointment for our members and their hard-working staff.”

Not everyone has criticised the Government, though, as Aged Care Workforce Industry Council (ACWIC) Chair, Libby Lyons, recognised the challenges involved in the process.

Ms Lyons said there was disappointment over the delays but she did not want to see aged care providers impacted by additional administrative burden.

“Aligning the pay rise with the start of the financial year and planned reforms will reduce the potential administrative burden on providers and employers, which is a significant concern in a sector that is undergoing major transformation,” said Ms Lyons.

“At the same time, we acknowledge that this is a bitter blow for affected workers, many of whom are struggling to make ends meet in these challenging times, with ever-increasing costs of living due to high inflation and interest rates.”

Ms Lyons said the 18-month turnaround may not be enough to help all aged care workers and she believes that more will exit despite the future benefits.