Aged care workers to receive pay rises

A further $3.8 billion is set to be invested in aged care by the federal government over the next four years.

The funding will go towards the Fair Work Commission Aged Care Work Value to provide pay rises for aged care workers from 1 January 2025. Many workers will also receive further increases from 1 October 2025.

“These award wage increases apply to workers who provide more direct support and care to older people — personal care workers, assistants in nursing, recreational activities officers and home care workers. They also apply to those workers whose roles support the running and functioning of residential care services — administration staff, drivers, maintenance staff and gardeners, laundry hands, cleaners and food services assistants,” said Anika Wells, Minister for Aged Care.

Historic aged care reforms announced in response to the final report of the Aged Care Taskforce outlined a number of essential changes to improve the funding, viability and quality of residential care.

Ahead of those changes commencing on 1 July 2025, the government is supporting residential aged care providers to meet the increasing costs of delivering care and hotelling services to older people in residential care settings.

From 1 October 2024, the Australian National Aged Care Classification (AN-ACC) price will be increased to $280.01, which funds the FWC Stage 3 increase as well as other cost increases. This represents a 13% increase in average daily funding and will also enable providers to meet the increase to 215 care minutes that also comes into effect on 1 October 2024.

Changes to AN-ACC fixed and variable funding categories will also be implemented on 1 October to better align funding with costs, informed by 2024–25 pricing advice from the Independent Health and Aged Care Pricing Authority (IHACPA). The government said this will particularly benefit regional and rural services, which have higher care costs compared with services in metropolitan areas.

From 20 September 2024, the hotelling supplement increased from $11.24 to $12.55 per resident per day. This includes $1.09 to fund the FWC Stage 3 increase. There will be a further increase of $1.89 on 1 July 2025 to fund higher hotelling costs as announced on Thursday, 12 September 2024. These two increases will ensure providers are funded to deliver the cost of everyday living services, consistent with the recommendation of the Final Report of the Aged Care Taskforce that funding for daily living needs to cover the full cost of providing these services.

For the Home Care Packages (HCP) Program, the government has earmarked $0.4 billion over four years to increase the Commonwealth portion of the home care subsidy. The government said that this subsidy increase will enable providers to pass on the historic wage increase to staff and ensure that care recipients will see no change in their services or hours of care.

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