NZ: New equal pay deal has one aged care facility already closing

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The NZ Government has mandated equal pay for male and female aged care workers.

The changes, which we outlined here, only came into effect on 1 July (three days ago), but have already seen the Alphacare Resthome in Hamilton shut its doors since the changes were announced in April.

We caught up with Simon Wallace, Chief Executive of the New Zealand Aged Care Association, who says that they have now fielded about 100 calls from providers who say that the settlement is going to leave them out of pocket.

“Some have told me that they will close, some will have to make staff redundant, some will need to cut back staff shift hours and this is because the Government is not meeting all the costs associated with the uplift in caregivers wages,” he said.

NZACA estimates around 25% of its 600 members will be financially disadvantaged by the changes, with the majority affected being the smaller, stand-alone and religious aged care groups.

While the Government has promised that the pay increase would be covered, Mr Wallace says not every provider is finding the funding adequate and for self-funded residents, fees will go up around $4,500 per person.

While the NZACA supports caregivers’ wages going up, Mr Wallace says that the funding formula is based on averages so if providers have staff who are more qualified and have been employed longer, they will need to be paid more.

“Many providers don’t have the economy of scale to move people across the business. They also tend to be in a rural area where there’s not a lot of employment choice so people have worked for their employers for a long time and there’s really good retention,” he added.

NZACA is now working with the Government to create a transitional relief initiative for these smaller providers to try to prevent more from shutting down.

So could we see the same here if aged care wages rise?

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