Aged care workers may wait until 2026 for full pay increase

The Albanese government seeks to delay aged care workers' wage rises of 23 per cent by almost two years due to concerns that a large pay jump could fuel labour shortages by attracting workers from other sectors.

The government has requested that the Fair Work Commission phase in the increase over two years in two halves from January 2025 to January 2026

In a submission released on Friday, the government said the proposed compensation was deemed "fair and reasonable" for workers engaged in direct care.

The decision aligns with the government's fiscal strategy, especially considering aged care workers had already received a 15 per cent interim pay increase in November 2022.

However, indirect workers, such as administrative workers, cleaners, and chefs, could expect their smaller pay increases sooner, as the government accepted a January 2025 start date for these workers.

The government submitted that it would commit to fund 50 per cent of the remaining pay increase for direct care workers in January 2025 and the remaining rise in January 2026.

Citing statistics that listed job vacancies in the industry as 118 per cent higher than two years ago, they said the 12-month delay was due to "employment shortages [that] are prevalent across the economy, including in sectors such as hospital nurses, disability carers and childcare workers who have substitutable skills with aged care workers".

"The commonwealth considers it prudent to adopt a phased approach to the funding of large one-off wage increases, particularly where large wage increases may draw workers from other sectors of the economy that also face employment shortages," the submission said.

The government also noted its "fiscal strategy, which is focused on improving the budget position in a measured way, consistent with the overarching goal of reducing gross debt as a share of the economy over time".

Health unions have responded angrily to the proposal and argued delays would further pressure the sector to retain existing staff.

President of the Health Service Union Gerard Hayes said the government's decision if accepted, would mean workers would have to wait six years for their total pay raise given that their work value case started in 2020.

"We’re not talking about getting a few more people into the sector – we’re talking about stopping the hemorrhaging of people leaving,” he told the Australian Financial Review.

"A phasing program will maintain more pressure on the sector as opposed to what’s really needed – to attract and retain."

Mr Hayes also disputed the argument that disability carers – who received up to 45 per cent pay rises from 2012 to 2020 on equal pay grounds – might transfer to aged care as workers in the sector were paid below comparable sectors.

"With the full increase, they will become somewhat competitive in public health," Mr Hayes said.

"It’s an oxymoron to say that their wage gain would be at the disadvantage of other groups."

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