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Budget 2023: wage increase in the aged care sector to cost budget $ 11.3 billion


A “historic” 15 percent pay increase for hundreds of thousands of elder care workers nationwide will cost the federal budget more than $11 billion, the federal government has confirmed.

A cornerstone election pledge of the Albanian government, backed by the Fair Work Commission, long-awaited Treasury figures reveal that the bill for the industry’s largest 250,000 workers in four years will total $11.3 billion in wage increases.

The wage increase – which will put significant strain on the budget – will be passed in full from July and will increase the wages of registered nurses, registered nurses, nursing assistants, personal carers, home care workers, lifestyle workers, and chefs and cooks.

A registered nurse at level 2.3 of their industry award will receive a pay raise of more than $10,000 – an additional $196.08 per week.

An Enrolled Nurse with a Level 2 salary gets an additional $145.54 per week, totaling more than $7,500 per year.

Personal Care Staff at Level 4 of their award and Level 4 Senior Care Chefs receive an annual supplement of $7,300, or $141 per week.

Aged Care Minister Anika Wells said the raise was a “historic and deserved pay rise for a workforce that has been undervalued for far too long”.

“Fair wages play an important role in attracting and retaining workers to provide 24-hour care to some of Australia’s most vulnerable people,” she said.

“This wage decision will help more women and families make ends meet, and make quality aged care workers less likely to consider leaving the industry because of wage concerns.”

Treasurer Jim Chalmers said the funding would bring a “fair day’s wages for a fair day’s work” to the industry, but acknowledged the move would further strain next week’s budget.

“For too long, those working in aged care have been asked to work harder for longer without adequate pay, but this budget changes that,” he said.

“This investment recognizes the incredible contribution aged care workers make to our economy and community and will help create greater incentive for young Australians looking for a rewarding career to choose aged care in the future.”

The United Workers Union praised the federal government for “keeping its promise” to fund the wage increase in full.

“The 15 percent pay rise is an important step towards recognizing the incredible sacrifices aged care workers have made, and is comforting that the coalition government’s terrible years of underfunding and understaffing are coming to an end,” said Carolyn Smith of UWU .

Meanwhile, the Health Care Union says 15 percent is still not enough, and wants another 10 percent.

The price of the National Aged Care Classification Model will be increased to $243.10 to cover the wages of direct care workers, including lifestyle workers.

A new $10.80 per day hotel allowance will be introduced to cover the cost of chef and cook salary increases.

The value of home care packages will also be increased to ensure those workers can get the extra 15 percent.

Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.