Care Association New Zealand (CANZ) co-founder VICTORIA BROWN says residential aged care providers should not have to pay for the pay equity settlement out of their pockets because the methodology is so flawed.

For providers in the aged care sector, the opportunity to pay staff really good wages was an event to be applauded and long overdue. The work is often tiring and dirty and some tasks are very thankless. However, instead of this pay settlement giving the sector a chance to celebrate it is going to be the last straw for some of us. Why? Because it has been so badly calculated.

During the A21 meetings, there was talk of there being “winners and losers”. When asked to clarify exactly what was meant by the term, CANZ was told that if you had been paying staff well then you could expect a bit of a windfall and if you hadn’t been then you could be in trouble. And is this what has happened? Far from it! Those providers who have had very stable, long-serving staff who they have trained and educated well, now find themselves with a wage bill that they just cannot afford.

The settlement, which is to pay for an increase in wages to health care assistants (HCAs), should have been passed through properly and correctly to aged care facilities. It is quite evident that this is not happening.

But this is not the only problem. For facilities that through a business decision, or out of necessity, have picked up other contracts – especially mental health – are now told that these contracts will not attract an increase in the bed day rate. Will this mean that people with mental health issues will not be admitted to rest homes anymore?

And the bed day rate only applies to occupied beds – so the actual money coming in is going to less than what we need. The settlement is meant to be “fully funded” but it is certainly not.

There seems to have been a miscalculation in the a) numbers employed in aged care and b) the level of qualifications. Whereas the settlement looks to have predicated that most staff would start on Level 0 or 1 – many are starting on the higher pay bands immediately. This has a huge impact on the cost to providers of the settlement. With large numbers of HCAs needed because of the high dependency of those in aged care, this has also caused a huge error for which the providers have to bear the cost. And what about the rest of the staff? It is often difficult to pay some and not others.

So how will providers survive post July 1st. What is likely to happen is:

  • Some will close their doors – in fact there are already reports of potential closures – with a consequent loss of employment for some HCAs. Some of these could be in the rural communities where aged care can be the main employer – and where Māori form a significant part of the workforce.
  • Some are looking at restructuring and there may be redundancies.
  • Some are looking to employ only unqualified staff in order to make the numbers work – and isn’t that defeating the whole purpose of this?
  • Some providers will have to make decisions on staffing numbers and can no longer be so generous in their staffing complement.

CANZ is represented on the A21 Steering Group but it erroneous to say CANZ agreed with the methodology of passing the money through. It is neither fair nor equitable. And providers should not have to pay for this settlement out of their pockets because the methodology is so flawed.

HCAs need to be paid better – no question. But providers need to be paid accurately so that they can fulfil their legal obligations to this. Anything less cannot be contemplated.


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