The recent Age-Related Residential Care (ARRC) contract negotiations yielded a 1.8 per cent funding increase. Some providers say it isn’t enough, but the NZACA says it is a step in the right direction.

While a 1.8 per cent funding increase is the largest increase the residential aged care sector has seen in recent years, some providers feel the sector could have pushed for a greater increase still, particularly given the need for the government to be seen to be actively investing in the sector in an election year.

However, New Zealand Aged Care Association (NZACA) chief executive Simon Wallace has defended the negotiations and assured members that they remain focused on working with the current and future governments to secure a sustainable investment in aged care.

“We have worked very hard to negotiate the 1.8 per cent increase and whilst we’d like to have secured more, given the recent chain of events, we do consider it to be a reasonable increase for the forthcoming year – and a lot better than the average of less than one per cent we’ve seen in the past three years.”

The recent events Wallace mentions refers primarily to the $2 billion pay equity settlement. Pay equity funding will be on top of the ARRC-related bed day-rate funding increase.

“It is still too early to tell whether this, combined with the caregiver pay equity increase, will cover all wage increases and other costs, especially for our smaller providers, many of which we know are struggling,” says Wallace.

He believes the Government is starting to listen and to understand the historical funding shortfall in the aged residential care sector. As part of the ARRC negotiations, the Government has invested into the funding model review, which Wallace says demonstrates a “clear willingness to work further on developing solutions to the wider issues”.

Tenders opened on 15th May for an agency to undertake the funding model review to identify alternative options and make recommendations. The tender process closes at the end of June.


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