Effects of the Pay Equity Settlement in New Zealand

Financial Performance Analysis

In April 2017, the New Zealand Government announced a historic $2 billion Pay Equity Settlement for care and support in NZ’s aged care, disability and community support services.

Care workers make up approximately 70% of an aged residential care facility’s staff and are integral to the daily operations of a facility.  Following the Pay Equity Settlement Agreement, there has been a mandated increase in wage rates for care workers, with the minimum wage for care givers increasing by approximately 21% as of 1 July 2017.  Care giver wages will continue to rise progressively over the coming three years.

Ansell Strategic and the NZACA recognised the need to collect data and present timely information on the financial impact the Pay Equity Settlement has had on the viability of the aged residential care sector.  This information can be used to inform policy makers, providers and other stakeholders of the industry’s current position.

This report provides a summary of the findings from this survey including the impact on financial performance and future of the sector.