Mon Mar 18

Who will look after us in our final years? A pay rise alone won’t solve aged-care workforce shortages

Written by: Stephen Duckett, Honorary Enterprise Professor, School of Population and Global Health, and Department of General Practice and Primary Care, The University of Melbourne

Aged-care workers will receive a significant pay increase after the Fair Work Commission ruled ^[1] they deserved substantial wage rises of up to 28%. The federal government has committed to ^[2] the increases, but is yet to announce when they will start.

But while wage rises for aged-care workers are welcome, this measure alone will not fix all workforce problems in the sector. The number of people over 80 is expected to triple over the next 40 years ^[3], driving an increase in the number of aged care workers needed.

How did we get here?

The Royal Commission into Aged Care Quality and Safety, which delivered its final report ^[4] in March 2021, identified a litany of tragic failures in the regulation and delivery of aged care.

The former Liberal government was dragged reluctantly to accept that a total revamp of the aged-care system was needed. But its weak response ^[5] left the heavy lifting to the incoming Labor government.

The current government’s response started well, with a significant injection of funding ^[6] and a promising regulatory response. But it too has failed to pursue a visionary response to the problems identified by the Royal Commission.

Action was needed on four fronts:

ensuring enough staff to provide care
building a functioning regulatory system to encourage good care and weed out bad providers
designing and introducing a fair payment system to distribute funds to providers and
implementing a financing system to pay for it all and achieve intergenerational equity.

A government taskforce which proposed a timid response to the fourth challenge ^[7] – an equitable financing system – was released at the start of last week.

Consultation closed on a very poorly designed new regulatory regime ^[9] the week before.

But the big news came at end of the week when the Fair Work Commission handed down a further determination ^[10] on what aged-care workers should be paid, confirming and going beyond a previous interim determination ^[11].

What did the Fair Work Commission find?

Essentially, the commission determined that work in industries with a high proportion of women workers has been traditionally undervalued in wage-setting. This had consequences for both care workers in the aged-care industry (nurses and Certificate III-qualified ^[12] personal-care workers) and indirect care workers (cleaners, food services assistants).

Aged-care staff will now get significant pay increases – 18–28% increase for personal care workers employed under the Aged Care Award, inclusive of the increase awarded in the interim decision.

The commission determined aged care work was undervalued. Shutterstock/Toa55 ^[13]

Indirect care workers were awarded a general increase of 3%. Laundry hands, cleaners and food services assistants will receive a further 3.96% on the grounds ^[14] they “interact with residents significantly more regularly than other indirect care employees”.

The final increases for registered and enrolled nurses will be determined in the next few months.

How has the sector responded?

There has been no push-back from employer groups or conservative politicians. This suggests the uplift is accepted as fair by all concerned.

The interim increases of up to 15% probably facilitated this acceptance, with the recognition of the community ^[15] that care workers should be paid more than fast food workers.

There was no criticism from aged-care providers ^[17] either. This is probably because they are facing difficulty in recruiting staff at current wage rates. And because government payments to providers reflect the actual cost of aged care ^[18], increased payments will automatically flow to providers.

When the increases will flow has yet to be determined. The government is due to give its recommendations for staging implementation by mid-April.

Is the workforce problem fixed?

An increase in wages is necessary, but alone is not sufficient to solve workforce shortages.

The health- and social-care workforce is predicted ^[19] to grow faster than any other sector over the next decade. The “care economy” will grow ^[20] from around 8% to around 15% of GDP over the next 40 years.

This means a greater proportion of school-leavers will need to be attracted to the aged-care sector. Aged care will also need to attract and retrain workers displaced from industries in decline and attract suitably skilled migrants and refugees with appropriate language skills.

Aged care will need to attract workers from other sectors. nastya_ph/Shutterstock ^[21]

The caps on university and college enrolments ^[22] imposed by the previous government, coupled with weak student demand for places in key professions (such as nursing), has meant workforce shortages will continue for a few more years, despite the allure of increased wages.

A significant increase in intakes into university and vocational education college courses preparing students for health and social care is still required. Better pay will help to increase student demand, but funding to expand place numbers will ensure there are enough qualified staff for the aged-care system of the future.