The Fair Work Commission’s decision last Friday to further increase wages for aged care workers is a positive step for the sector – but has again highlighted the growing costs facing the taxpayer and providers.

As we reported earlier this week, the Fair Work Commission (FWC) awarded direct care workers wage increases of between 2% and 13.5% to address the historic bias that has undervalued aged care work – cleaners, food services assistants and laundry staff were given an increase of just under 7% while administrative and other support staff were awarded 3%.

The decision comes on top of the interim 15% wage rise that came into effect on 1 July last year – that increase cost the Government $11.3 billion over four years.

Govt quiet on fully funding wage rise

The politicians have been quiet about whether they will fully fund the decision – which is estimated to cost another $3.3 billion over the next four years according to StewartBrown.

Prior to the decision, the Government had said it was committed to supporting the outcome of the aged care work value case.

But earlier this week, Anthony Albanese was more circumspect.

“It’s quite a complex decision,” said the Prime Minister. “We’ll work our way through it.”

The presentations at this week’s LEADERS SUMMIT have highlighted just how much pressure that is.

Ansell Strategic Managing Director, Cam Ansell, noted to the audience that spending on aged care as a percentage of GDP has doubled in just 20 years. At the same time, the number of taxpayers has halved.

He also pointed out that the demand for hospital services has increased by 350% for the over-65s in the past 30 years.

Media: Minister hammering out funding deal with Opposition

The message?

Despite increasing Government expenditure, the cost of delivering aged care services continues to outstrip funding and demand.

But there is good news.

Firstly, the Independent Health and Aged Care Pricing Authority (IHACPA) is due to hand down its recommendations for aged care pricing in August this year to commence from 1 October.

Secondly, we now have the Aged Care Taskforce’s recommendations, which support a range of reforms to return the sector to sustainability – including a role for increased consumer contributions.

Media speculation this week has suggested that Minister for Aged Care, Anika Wells, is currently hammering out a deal with the Opposition for additional funding into the sector.

Watch this space then.