4.75% award wages rise a new cost to bear for aged care operators
Wage rise lands before funding relief
- 4.75% increase: Award wages rise from 1 July
- Three-month lag: AN-ACC funding doesn't increase until October
- Margin squeeze: Providers absorb higher costs upfront
- Growing pressure: Sector wants funding aligned with wage decisions
On Tuesday, the Fair Work Commission announced a 4.75% increase in award wages, citing a catch up in real wages was needed to offset cost-of-living pressures.
With the next increase in AN-ACC funding not commencing until 1 October, aged care operators will be left carrying the Annual Wage Review decision for at least three months.
At a time when care margins are already constrained across the residential and home care sectors, aged care operators paying the award wage - estimated at 9,200 workers for the Aged Care Award - will be slugged with a higher, unfunded wage costs.
The new national minimum wage of $26.44 per hour, or $1,004.90 per week, will take effect from 1 July. The rise will flow through to Award-reliant workers, including - for aged care - the Aged Care Award, the Nurses Award, and the Social, Community, Home Care and Disability Services (SCHAD) Award.
Many in the sector say the timing of AN-ACC funding increases needs to be brought forward.
In last year's consultation on the IHACPA's Pricing Framework for Australian Residential Aged Care Services 2025-26, Ageing Australia wrote in their submission the October timing limits the ability of providers to budget and plan for their businesses.
