Handful of rest homes close after pay equity deal

A handful of rest homes have shut their doors in the wake of the Government’s pay equity deal for workers. Photo / 123RF

A handful of rest homes have shut their doors in the wake of the Government's pay-equity deal for workers, reports RNZ radio network.

The 55,000 workers in the aged-care and support sector will receive pay rises to between $19 and $27 an hour over the next five years.

On July 1 workers on the minimum wage of $15.75 per hour moved to at least $19 an hour.

The Care and Support Worker (Pay Equity) Settlement is partly funded by the Government's $2 billion package.

But care facilities pick up the remaining tab.

Aged Care Association chief executive Simon Wallace told RNZ today that the deal had resulted in three or four homes closing.

"We have a range of members from the very large ... to very small members and they're all around the country. A number of our members are facing difficulty as a result of the pay equity settlement since it was implemented. They are having to look at their business model as they go forward. That means restructuring. That means job losses potentially. That means cutting back care hours, and in some cases that means closing," he told RNZ.

"I'm now hearing from our larger members ... some with more than 100 beds. It's not just the small and the rural and the not-for-profit and the faith-based."

Care Association New Zealand committee member Jessica Buddendijk told the Herald in June that she wanted the Government to fully fund the change.

At the time, she'd heard of two facilities closing so far and many more "have the writing on the wall".

"The Government have promised it would be fully funded. That's what we're asking for. The sad thing is this is taking away from celebration of the enormous positive outcome."