From July 1 caregivers will receive a pay rise between 15 and 50 per cent, depending on their qualifications and/or experience.
Health Minister Jonathan Coleman announced today that, subject to legislation approval, the 55,000 workers in New Zealand’s aged care, community support and disability sectors will see wages increase to between $19 to $27 per hour over five years. This announcement has been largely welcomed by the sectors.
So, the 20,000 workers who are currently on the minimum wage of $15.75 per hour will move to at least $19 per hour – a 21 per cent pay rise. A care and support worker on the minimum wage with three years’ experience and no qualifications will receive a 27 per cent increase in their hourly wage rate moving from $15.75 to $20 per hour from July 1. That rate would progressively increase to $23 by July 2021 and would rise further if they attain a higher qualification.
Dr Coleman says the pay equity settlement will cost the Government $2.048 billion over five years. It will be funded through an increase of $1.856 billion to Vote Health and $192 million to ACC.
The Minister says that while ACC levies are set for the coming years, it is possible they may increase over the next decade.
He also says there may also be an increase in costs for people in aged residential care facilities, whose assets keep them above the subsidy threshold. This will be determined through the annual Aged Residential Care contract negotiations.
The settlement negotiated between the Government, unions and sector organisations follows the pay equity case brought by rest home caregiver Kristine Bartlett and E tū. They argued that aged care workers’ pay rates were in breach of the Equal Pay Act because “women’s work” was systemically under-valued. While the courts ruled in Bartlett’s favour, establishing a pay rate that was deemed fair has not been straightforward. The tripartite out-of-court settlement negotiations have been running for two years.
The New Zealand Aged Care Association welcomes the Government’s decision today, describing it as a “game changer” for the industry.
“We have campaigned for many years on behalf of our caregivers, for appropriate funding to pay them for the wonderful job they do looking after New Zealand’s elderly population,” says chief executive, Simon Wallace.
Chief Executive of the Home and Community Health Association, Julie Haggie says the settlement will lead to a well-trained, better paid and more stable care workforce.
“For home support this more properly recognises the work that is done. It also incentivises employees to get qualifications earlier and to stay in this sector for longer.”
Care Association New Zealand director Victoria Brown agrees the pay increase is well deserved for workers. However, she says there is some concern among the sector about how the Government’s funding mechanism will work to ensure providers can afford to pay the increased wages, particularly in light of the knock-on effect today’s announcement may have in raising the wages of other staff not covered by the settlement agreement.