Pay increase for aged-care workers accelerated in Fair Work Commission ruling

The Australian, 21 February 2023

Hundreds of thousands of aged-care workers will receive a 15 per cent pay rise from July 1 this year after the Fair Work Commission rejected the Albanese government’s move to stagger the increase over two years.

In a ruling on Tuesday, the FWC also extended the 15 per cent increase beyond the more than 300,000 direct aged-care staff to include head cooks, leisure and lifestyle workers.

The ruling confirmed both ­direct care workers and those in the other categories were not being adequately compensated.

The commission also said its decision was interim only, as it was still considering union claims for a 25 per cent rise for all workers and for the increase to extend to care staff in administrative and maintenance roles.

The ruling pointedly specified the full pay rise must “take effect from June 30, 2023”. After last November’s FWC ruling of a 15 per cent pay increase for direct care staff, the government said it would fund the full ­increase, but in December submitted to the FWC a plan to phase it in through a 10 per cent hike on July 1 and 5 per cent the following year.

Health Services Union nat­ional president Gerard Hayes said the FWC decision to apply the full 15 per cent wage rise from June 30 would “help stave off the collapse of the workforce”.

“To prevent aged care from collapsing every link in the chain must be strengthened,” Mr Hayes said. “HSU will continue its efforts to have an additional 10 per cent increase applied, taking the entire increase to 25 per cent. We will also continue to push hard for this to apply to the entire aged-care workforce.” 

Aged care is one of the government’s biggest and fastest-growing spending programs. The government’s October budget put the cost at $27bn this ­financial year, rising to nearly $35bn by 2025-26, even without taking into account the FWC wage decision.

Treasurer Jim Chalmers has flagged future aged-care costs as a particular concern for the federal budget and the staggered pay increase was seen as an ­attempt to delay some of the impact.

About 210,000 workers are in direct care roles in residential aged-care centres, according to the most recent aged-care workforce census published last year, with a further 124,000 providing in-home care. That doesn’t include the new categories to be awarded a pay increase.

They are recreational and lifestyle staff who typically ­organise games, exercise programs, pastoral care and cultural activities, along with head chefs or cooks, provided they are the most senior chef or cook ­engaged in the facility. Pay rates range from $24.50 per hour for leisure staff to $27 an hour for senior chefs.

The government appears to have little choice other than to fund the wage rise from June, given the parlous financial state of age- care providers.

A report in January from aged care specialist StewartBrown found the residential aged-care system was under “critical” threat, with seven in 10 nursing homes operating at a ­financial loss, rapidly declining occupancy levels and severe staff shortages jeopardising the care of hundreds of thousands of people. 

Tom Symondson, chief executive of peak provider advocacy group Aged and Community Care Providers Association, said he was concerned the FWC hadn’t specifically tied the pay increase on June 30 to government funding, as the sector couldn’t afford unfunded pay increases of that scale. “With seven out of every 10 aged-care providers already losing an average of $21 per resident per day, this decision of the commission changes everything,” Mr Symondson said.

“We have publicly supported the need for significant pay rises for our workforce, and fully supported the government’s 2022 election commitment to fully fund them. However, this must not be at the costs of our sector’s ability to deliver care to older Australians.”

Australian Nursing and Midwifery Federation federal secretary Annie Butler said the ruling was “a great win”.

“The order to pay the full 15 per cent this year not only recognises the severe undervaluation of aged care workers under the current award system, but also acknowledges the rising cost of living pressures these workers continue to face, whilst receiving chronically low wages,” she said.

Aged Care Workforce Industry Council deputy chair Graeme Prior said: “It is wonderful to see that more aged-care workers will get a timely wage increase to ­acknowledge the value of the ­essential work that they do.”