Advisory on Equal Pay under-funding
26 July 2017
In recent weeks media have run stories claiming the Pay Equity Settlement for care and support workers in aged care will beggar many small rest homes, with some planning to reduce hours and cut staff to comply with the Settlement.
It is also claimed that the Settlement is not fully funded and that there is a funding shortfall of about $250 million which rest homes must pay for.That figure is now being reported as if it is fact which is not the case.
E tū which is familiar with the enabling legislation of the Settlement would point out the following:
• The intention of the Government is to fully fund the direct costs of the Settlement.
• Employers will receive additional funding towards offsetting the additional costs imposed by the legislation.
• The Care and Support Worker (Pay Equity) Settlement Act, which is based on the settlement agreement is clear on the funding issue – see below for the relevant sections of the Act:
18 Funding amounts increased
(1) A funder must pay an employer with whom the funder has a funding agreement additional amounts over and above the amounts required by the funding agreement towards offsetting the additional costs faced by the employer as a result of this Act.
(2) The funder must determine the additional amounts, taking into account—
(a)the increased wage costs faced by the employer as a result of this Act; and
(b)the increased training costs faced by the employer as a result of this Act; and
(c)any other matter that the funder considers appropriate.
• Funding will be provided 3-months in advance to employers, with audits then carried out to ensure the funding – particularly for smaller employers - is sufficient to meet the legislative commitments. This is specifically accounted for in the Settlement Agreement.
• E tū has raised the concerns raised by smaller rest homes and the Aged Care Association with the Ministry of Health which is working to ensure those rest homes are not jeopardised by the Settlement.