Aged & Community Care Providers Association (ACCPA), the new peak body representing aged care providers, has welcomed today’s Fair Work Commission decision to put more money in the pockets of low-paid workers, but is concerned that inadequate indexation of Commonwealth funding means it will be impossible to realise improvements in quality of care.

“Everyone knows aged care workers need a significant pay increase, but without additional support from government aged care providers will continue to face what the Royal Commission described as an impossible choice between investing in quality and finding savings to keep the doors open,” Interim CEO of ACCPA Paul Sadler said.

“If we don’t see urgent action the aged care workforce crisis is simply going to translate into other serious problems like increased closures, or offsets in other areas such as training or investment in facilities.

“A significant wage increase for our workforce is essential to attract new people and improve quality of care to older Australians, but when two-thirds of providers are already running at a loss year-on-year, we need the wage increase to be funded by the federal government.

“ACCPA welcomes the Albanese Government’s commitment to fully fund the outcome of the current Fair Work Commission aged care work value case”, Mr Sadler added. “However, the work value case probably won’t conclude until early 2023, while the minimum wage decision will flow from July 2022.

The Aged Care Royal Commission found that:

The Australian Government’s approach to indexation of funding levels for aged care services has been inadequate to keep up with real cost increases over many years. We recommend short-term measures to address the inadequacy of indexation of aged care funding levels in the next few years, until the independent pricing of aged care services by the Pricing Authority can begin.

The recommendation to fix indexation was not accepted by the previous government. Consequently, indexation in 2021-22 was just 1.1 per cent compared to last year’s 2.5 per cent Award Wage increase plus a 0.5 per cent increase in the Superannuation Guarantee.

An even bigger gap between the increase in wage costs and indexation is expected this year, unless the Royal Commission’s recommendations on indexation are accepted.

The latest report from UTS using data collected for the December Quarter of 2021 shows an average deficit of $11.30 per resident per day in residential care.

“To ensure more robust and evidence-based funding can be implemented from July 2023, the Government must also legislate the expansion of the functions of the Independent Health and Hospital Pricing Authority to include aged care, consistent with the Royal Commission’s recommendation on independent pricing,” Mr Sadler said.

“We look forward to working with the new Albanese Government to address this issue and other unfinished business from the Royal Commission.”

Media contact: Jane Garcia 0455 111 593

About Aged & Community Care Providers Association:

ACCPA was announced on May 3, following a call by the Royal Commission into Aged Care Quality and Safety last year, which recommended greater industry collaboration and unified leadership. As a result, a transformation committee was formed to help drive change.  Members of peak bodies Aged & Community Services Australia (ACSA) and Leading Age Services Australia (LASA) then voted in favour of creating the single industry association at respective Special General Meetings on 29 April, paving the way for the creation of ACCPA by July 2022. ACCPA will represent over 1,000 aged and community care organisations.