MEDIA RELEASE

31 March 2007

Aged Care Providers Support Minimum Wage Increase

HealthCare Providers NZ supports the minimum wage increase, but says government funding needs to increase to compensate providers for the full impact on care giver wages.

Maintaining the relativities between new and experienced caregivers is the true cost impact of any minimum wage increase. HealthCare Providers have modeled the impact of the minimum wage increase from $9.25 to $10.25 at about $12 million.

“When the minimum wage increases, all rates for caregivers have to go up, because employers need to maintain the current relativity between the minimum wage and current starting rates. They also have to maintain the current relativity between new caregivers and experienced caregivers”, said Martin Taylor CEO of Healthcare Providers NZ.

In December 2006, wage rates for caregivers ranged from $9.25 to $19.45, depending on experience and qualifications. The average rate for caregivers with less than one year’s experience was $11.03 and the average for all caregiver rates was $11.86.

“The basis of low caregiver wages can be found in 2000, when the government set $10.35 per hour as the rate on which to fund the care component of the aged care subsidy. This rate was then kept artificially low as there were no inflation adjustments until 2003”, said Mr Taylor

“We conducted a survey in December 2006, which covered 16,262 aged care staff. The results established caregiver wages rose on average 4.7% last year. This was well above the 3% funding increase for rest homes. Nurse wages also went up by 6.7%, which again was higher than the 5.9% increase given for hospital level care, said Mr Taylor.

ENDS

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