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Increase in Minimum Wage Leads to Contractual Claim

Media release from NZ Aged Care Association

Increase in Minimum Wage Leads to Contractual Claim from Aged Care Sector

On 12 March, the NZ Aged Care Association initiated a claim against the Government for increased funding to compensate aged care employers for the impact of the April minimum wage increase.

The claim is under clause A23 in the contract providers have with DHBs.

The impact of the minimum wage on aged care employers will be between $17.8 million and $20.1m.

“The Aged Care sector is directly funded by the Government, which is why wages are so low,” Martin Taylor, Chief Executive of the NZ Aged Care Association, said.

The increase in the minimum wage will not affect DHB hospital caregivers as they are funded by the Government to support wages of more than $17.50 per hour.

“We wish the Government valued our workforce as much as their own caregiver workforce. But this is not the case. The harsh reality is our average caregiver wage is $15.32 per hour with many sadly well under this.”

“Currently, the Government is only offering an annual cost impact adjustment of 1 percent. This offer is meant to cover an increase of 3.6 percent, in aged care inflation, last year’s KiwiSaver increase of 1 percent, and now an increase in the minimum wage,” Mr Taylor said.

“Before the minimum wage increase it was going to be hard for an employer to give any pay increase to caregivers this election year. Now it is likely to be impossible.”

“The discrimination against caregivers in the private sector has to end. Present levels of Government funding undervalue the elderly, their caregivers and providers. It’s time to right this injustice once and for all,” said Mr Taylor.


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