Aged care providers have been left shocked after the increase in funding they will receive next financial year will be insufficient to cover the compulsory increase in their wages bill.
The Department of Health and Aged Care hosted an ‘Aged care wage increase’ webinar on Thursday, providing further detail about funding of the wage rise and answering questions about the upcoming pay rise for residential aged care workers.
Last February, the Fair Work Commission (FWC) granted direct care aged care workers a 15% pay rise, and then earlier this month, the FWC increased the minimum wage by 5.75%.
Emma Gleeson, Assistant Secretary, Workforce Branch, Department of Health and Aged Care, confirmed that the Fair Work Commission’s 5.75% increase in the minimum award will apply to all aged care workers on a federal award from 1 July 2023.
The 5.75% increase will apply on top of the 15% Work Value increase for eligible workers, which will apply from 30 June 2023.
Mark Richardson, Assistant Secretary, Residential Care Funding Reform Branch, Department of Health and Aged Care, said AN-ACC “definitely” covers the 15% increase.
But he was less certain AN-ACC will cover the 5.75%. He said IHACPA has included a forecast for inflation and “all wages” of 3.1% when calculating the $243.10, and that will cover the 5.75% increase.
There are concerns in the sector that this increase won’t be sufficient with annual inflation at 7%, falling from a peak of 8.4% in December 2022.
Russell Egan (pictured), CEO of Superior Care Group, says, “The increase in funding is inadequate. The Government has short changed providers again.”
CALCULATING ABOVE AWARD WAGES
Emma explained, as outlined in the ‘Guidance on aged care wage increase’ document, that aged care workers who are paid above the award should receive the same dollar-value increase as those who are on the award.
For example, an enrolled nurse pay point 2 on an enterprise agreement rate of $31.12 per hour, should receive an additional $3.48 per hour, as their counterparts on the award do. Their total hourly rate should increase to $34.96.
To ensure providers are held accountable for passing on the increased funding to aged care workers, the quarter 4 2023-24 quarterly financial report will collect additional information about wages, including the minimum and maximum wage rates for direct care workers, and information about the primary way workers are paid, for example through enterprise agreements or individual agreements.
“Providers of residential care and home care packages will need to attest in the quarterly financial report from quarter one in the new financial year that all funding provided to implement the 15% wage increase is passed through to workers,” Emma said
“Specifically, the attestation will seek confirmation from providers that they have passed on all funding that is identified as being for the purposes of the wage increases to workers as increases in wages and on costs taking into consideration this guidance.”
Aged care provider spending on labour and wages will be published on My Aged Care from January 2024 as part of a broad suite of expenditure reporting on My Aged Care.
HOME CARE GRANTS
Russell Herald, Assistant Secretary, Home Support Operations Branch, Department of Health and Aged Care, said home care worker pay rises will be funded by an 11.9% increase in funding.
He said a grant process will be opened in early August which will allow home care providers where the package is driven by high care costs to get “extra supplementation” where the 11.9% creates a “shortfall”. The grant is likely to be paid in December.
CHSP FUNDING
Commonwealth Home Support Programme providers will receive six months’ worth of their contract values in mid to late July to address cash flow issues meeting the increased wage bill.
Russell said the Department will be writing to CHSP providers soon with more details.
A transcript of the webinar will be available on the Department’s website soon.