Aged Residential Care Welcomes Promise Of Extra Funding

The aged residential care sector welcomed a promise made today by the Minister of Health to increase funding in this year's budget.

'It's good to see the Minister will begin to address under funding in this sector. Financial strain for providers has been exacerbated by the impacts of the $500 million NZNO wage settlement with DHBs, which forced up nurse wages, and also the significant impact of minimum wage increases" said Martin Taylor CEO of HealthCare Providers NZ

The causes of low caregiver wages in the sector are historically low funding, a legislative cap on income, and no guaranteed inflation adjustment. All of these factors undermine the ability of aged care providers to plan from one year to the next.

Mr Taylor said, "It is unfortunate the sector still has no automatic inflation adjustment, as this is one of the key reasons for low caregiver wages. It is also worth remembering the current government subsidy for rest homes was set in 2000 and based around a $10.35 per hour average wage for caregivers. In 2005, the average caregiver wage has increased to $11.33, which shows providers in rest homes had passed along the three inflation adjustments they have had over the last five years.

"The Minister has also said he is exploring ways of ensuring any increases flow through into wages. Any move by the government to be this prescriptive would need to come hand in hand with an agreed way of meeting all cost rises. If this does not happen, then maintaining the high quality of care currently delivered in rest homes will be put under pressure.

ENDS

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