Aged care sector backs 5.2% minimum wage rise but warns Fed Govt to increase funding as FWC decision likely delayed to 2023

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The Fair Work Commission’s (FWC) decision to lift the minimum wage by 5.2% – from $20.33 to $21.38, or around $40 a week for Australia’s lowest-paid workers – has received praise from the peak body Aged & Community Care Providers Association (ACCPA), but prompted calls for more funding for the sector.

The increase is expected to affect about 2.7 million Australians and will take place from 1 July 2022.

The newly crowned peak body has welcomed the ruling, but said that “inadequate indexation of Commonwealth funding” will make it impossible to improve the quality of care.

“Everyone knows aged care workers need a significant pay increase, but without additional support from Government, aged care providers will continue to face what the Royal Commission described as an impossible choice between investing in quality and finding savings to keep the doors open,” said interim CEO Paul Sadler (pictured above).

“If we don’t see urgent action the aged care workforce crisis is simply going to translate into other serious problems like increased closures, or offsets in other areas such as training or investment in facilities.

“A significant wage increase for our workforce is essential to attract new people and improve quality of care to older Australians, but when two-thirds of providers are already running at a loss year-on-year, we need the wage increase to be funded by the Federal Government.”

Despite a Royal Commission recommendation to fix indexation for aged care, the Federal Government did not take up the measure – the 2021-22 indexation was only 1.1% despite a 2.5% increase in the Award Wage and a 0.5% increase in the Superannuation Guarantee last year.

The FWC is also weighing up the unions’ 25% wage claim for aged care workers, but as we reported last week, the Commission has given the new Labor Government until 8 August to make new submissions.

As a result, the FWC is now not expected to hand down a final decision until 2023.