The prospect of achieving pay equity for carers has been described as a major coup for Tauranga's aged care sector.

The Government this week announced it would negotiate with unions and employers to settle caregiver equal pay claims, and the unions have agreed to hold off any legal action over pay equity after joining a group set up by the Government to make headway on the issue.

The establishment of the joint working group comes after the Court of Appeal found that to establish equal pay for workers in the female-dominated aged care industry, their pay must be equal to workers in a similar male-dominated industry.

The New Zealand Aged Care Association estimated female aged care workers earned on average $15.30 an hour. It is hoped the talks will result in an increase to $26 an hour.

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Wellington caregiver Kristine Bartlett, who visited Tauranga on a road trip this year to address aged care concerns, said the move would be deeply felt in Tauranga because it had so many retirement villages and rest homes.

Ms Bartlett headed the landmark Equal Pay Case with the Service and Food Workers Union and said it had significant ramifications for union members and potentially a range of female-dominated sectors.

"It's about time something like this happened so we're absolutely thrilled it's come this far.

"Women on the whole have always been undervalued so this will give a lot of hope to women," Ms Bartlett said.

New Zealand Aged Care Association chief executive Simon Wallace, who was speaking on behalf of Tauranga aged care facilities, said the move was positive and the association would take an active role in the negotiation process, expected to take several months.

However, the industry could not fund the equal pay claim without a clear indication from the Government that it could meet the extra cost.

"Our calculations show the sector would need to find an additional $500 million annually to increase caregiver rates to this level.

"That is clearly unsustainable and would force homes out of business, resulting in job losses and a lack of beds at a time when the number of New Zealanders requiring aged residential care is increasing," Mr Wallace said.

"Our members are good employers. They want to pay caregivers and other staff more for the important work they do, but they are hamstrung by a contract with the Government which funds homes for the care they deliver.

"That funding is insufficient for our members to increase wages, which account for up to 70 per cent of their costs."

The Service and Food Workers Union was unable to say how many members it had in Tauranga. additional reporting NZH