NZACA Conference 2018 – Effects of the Pay Equity Settlement

Published on 12 September 2018

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

Care workers make up approximately 70% of 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 a 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.

On 1 July 2017, contract prices for aged residential care services also increased (between $9.41 per resident per day to $16.18 per resident per day depending on the service type (plus 1.8% indexation). However there has been concern from providers that this change would be unable to offset the rise in wages. Whilst providers widely acknowledge that there is a need to equitably remunerate caregivers, the settlement has come at a time when provider viability and sector uncertainty is growing.

Ansell Strategic and the New Zealand Aged Care Association (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.

A comprehensive survey was conducted with the input from providers across the country. Participants of the survey submitted details of two periods of financial performance information.
The survey received responses from 68 operators, providing valuable information on 321 homes and almost 23,000 beds across New Zealand as at 31 December 2017.

Amber Cartwright, Manager – Advisory presented the findings at the New Zealand Aged Association’s Conference held in Auckland on the 11 September 2018.

If you missed her presentation in Auckland you can view it below.