Health Services Union launches landmark case in the Fair Work Commission to boost aged care wages by a huge 25% – price tag $2.3 billion

Published on

Over 200,000 personal carers, activities officers, catering, cleaning, and administration workers could see their pay rise by at least five dollars an hour if the case proves to be successful.

The HSU is arguing the pay of aged care workers does not reflect their skills or the changing nature of their work and a major wage rise is needed to stop them exiting the sector.

The HSU says that under the current rates for personal carers – which start at $21.96 per hour – the average carer retires with just $18,000 in superannuation.

More career paths and specialist roles recognised

If the claim succeeds, this would see wages for carers across the sector lifted from $23.09 to $28.86 an hour.

By our back-of-envelope calculations based on a 40-hour week for workers, the cost would be $2.3 billion.

The HSU also wants the decision to build in career paths and recognise specialist carers in areas like dementia or palliative care.

“Aged care in this country has relied for too long on the goodwill of an underpaid and insecure workforce of women. It’s time for change,” President Gerard Hayes (pictured above) said.

Mr Hayes says research shows that four in 10 aged care workers plan to leave the sector within the next five years.

“This pay rise is an issue of justice, but it also goes to the sustainability of the system,” he said. “The Federal Government cannot keep hiding behind the Aged Care Royal Commission. We need action immediately. The best thing the Commonwealth government can do is support this pay rise for the long-suffering aged care workforce.”

Increase to Medicare Levy could raise $20 billion over four years

As we reported here in September, the HSU recently released economic modelling which showed raising the Medicare levy by 0.65% to 2.65% would raise $20.4 billion over four years – funding pay rises for workers, an extra 59,000 aged care jobs and providing almost 90 minutes of additional resident care per day – but this idea was rejected by Prime Minister Scott Morrison.

But in the Royal Commission’s final hearing, Counsel Assisting also concluded that raising minimum wages in the sector was critical – and backed an equal remuneration case to ensure women and men are paid the same for their work.

So, will the union’s claim be successful?

Claims can take months – and years – to negotiate

The FWC has already made a ruling in favour of aged care workers this year, granting them paid pandemic leave in July and then extending it until March 2021.

But claims usually take between 18 months and two years to reach a resolution – in New Zealand’s 2017 equal pay settlement took 20 months of negotiations between providers, unions and Government after a court ruling found workers were entitled to wage rises.

Aged Care Minister, Senator Richard Colbeck would not comment whether the Government supported the claim, releasing a statement saying that the Morrison Government would wait for the Royal Commission’s Final Report in February.

However, Mr Morrison reportedly promised a “very substantial policy response” to the Royal Commission’s findings during a Coalition party room meeting on Tuesday.

Could this include implementing wage rises for the sector sooner?