The New Zealand Aged Care Association’s (NZACA) submission for next year’s round of contract negotiations says that as a result of the pay equity settlement there are a significant number of providers who are financially in deficit with a number of rest homes having closed.

“These closures are a direct result of a complex settlement that was implemented too quickly.”

The NZACA says many providers are being forced to make staff redundant, cut back rosters or reduce care hours. The submission goes on to state that these financial pressures are likely to be exacerbated further by the increase to the minimum wage.

It also calls for attention to the qualification equivalency process, for which the NZACA has sought and is now awaiting legal advice on a possible judicial review of the qualification equivalency process.

The biggest problem the NZACA would like to see addressed is the way the sector is funded for the settlement.

“Concerns have been raised from within the industry that over the next four years funding will not match the numbers of staff reaching higher qualifications.” The submission is calling for the pay equity funding mechanism to be reviewed. The NZACA has welcomed discussion on an alternative way of funding the settlement from 1 July 2018.

With regard to overall sector funding, NZACA chief executive Simon Wallace could not be drawn on the sector’s desired percentage increase. However, the submission states that funding should be linked to the Aged Care Price Index (ACPI), as opposed to the Consumer Price Index (CPI). This year’s increase was 1.8 per cent, the highest increase in recent years, however, the ACPI rose 2.6 per cent, in the year to June 2017, which gives a clue to the sector’s aspirations.

It would seem the Government expects to answer most of the questions around funding – including pay equity funding – with the funding model review. However, the NZACA has expressed concern that it will be years before the sector sees any benefit from any positive changes emerging from the review. Premium charging and palliative care are identified as two areas that need more urgent attention.

The submission also calls for a nationally consistent approach to the applications of interRAI assessments, stating that there are inconsistencies across the DHBs regarding assessments and their individual approaches to potential changes in levels of care.

Meanwhile Care Association New Zealand (CANZ) would like to see more flexibility built into the ARRC contract.

“There’s no room to move,” said director Victoria Brown of the current contract.

For example, Brown says CANZ members would like to see the structure of the TLA rate re-examined, particularly for Auckland facilities.

She also holds great concern for stand-alone providers, and would like to see some acknowledgement in the ARRC contract of the challenges faced by these providers, particularly those offering rest-home level care.


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