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Wage Increases Uncertain in Aged Care

23 MAY 2006

Wage Increases Uncertain in Aged Care until DHBs Address Impact of the NZNO MECA

Today the NZNO protested outside parliament to highlight low wages in the aged care sector. However, aged care representatives say that until DHBs and the government compensate the sector for the impact of the NZNO award agreement then Nurse and Caregiver wages will not significantly increase.

Martin Taylor, CEO of HealthCare Providers NZ, said everyone agrees that wages are too low, however, until DHBs and the Government address the issue, aged care providers will be unable to change the situation on their own.

Mr Taylor said, “You can’t give what you haven’t got”.

Last weeks Budget announcement, of an inflation adjustment plus 2%, although welcomed, will not address the issue of poor wages for caregivers or address the large gap between DHB nurse pay rates and aged care provider pay rates – a gap of up to 50% in some cases.

“The first step in addressing this issue is for DHBs to come to the table and agree on the NZNO MECA’s impact on nurse wages in the aged care sector”, said Mr Taylor

In the contracts between DHBs and providers, there is a specific legal obligation on DHBs to work with the sector and quantify the impact of events that undermine provider’s ability to operate.

The additional base line funding of $500 million given to DHBs exclusively for their nurses’ wages was such an event.

Mr Taylor said the impact of the Award Agreement on our nurse workforce cannot be under estimated.

“Unfortunately, for over a year DHBs have refused to meet their contractual obligations. This is why under the contract we have been forced to initiate the disputes resolution clause, in an attempt to get DHBs to the table”.

“All provider representatives are extremely disappointed that these government agencies have not acted in good faith or meet their contractual obligations”, said Martin Taylor CEO of HealthCare Providers NZ.


Additional Information

What is the contract called that is signed between DHBs and aged residential care providers?

The Aged Related Residential Care contract ( ARRC contract or ARC contract)

What clause in the contract means DHBs have to work with providers on quantifying the impact of variation events?

Clause A23

A23.1 This Agreement may be varied at any time by agreement between both of us and also on the occurrence of any of the following Variation Events:
a. Where either of us consider that changes occurring as a result of:
i. any change in law;
ii. any change in the definition of Eligible Person arising from a change in the law after the date on which this Agreement commences;
iii. significant changes in the health sector environment or costs that are beyond the control of either of us,
will have a material impact on the provision of Services including the costs of providing Services.
b. Where an Uncontrollable Event occurs. In that case clause A20 will apply in addition to provisions of this clause.
A23.2 On the occurrence of a Variation Event, we will both identify and quantify the impact of the Variation Event and will seek expert advice, if necessary, to assist us in doing so.

Where can I get a copy of the contract? click on ARRC Agmt_Advance Copy

When did aged residential care providers first ask to meet with DHBs over the impact of the NZNO MECA?

March 2005

How much did the NZNO MECA increase wages in DHB hospitals?

Over 20%

How many Nurses are there in the aged residential care sector?

About 3,000.

What is the current turnover rate in aged residential care for Nurses?


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