More than 2000 low-paid health care workers in Northland will receive hefty pay increases as part of a package worth more than $2 billion spread over five years.

The deal was announced by the Government and public sector unions this week for up to 55,000 workers, mostly women, in the aged residential care, home support and disability service sectors throughout the country.

It comes after a damning inquiry five years ago, which involved a senior public servant going undercover in a rest home.

Former Equal Opportunities Commissioner Judy McGregor posed as a care worker in a retirement home for a week in January 2012 as part of her year-long Caring Counts inquiry.


Her report concluded that aged care was a form of "modern-day slavery".

In the same year, caregiver and E tū member Kristine Bartlett brought an Equal Pay Act case against her employer, Terranova Homes.

The case was eventually referred to the Employment Court to set a fair rate for Ms Bartlett but before that happened, the Government intervened.

It asked E tū, the New Zealand Nurses Organisation, the Public Service Association and the Council of Trade Unions to instead work on a negotiated settlement to avoid further court action, and to extend coverage of the negotiations to include all care and support workers in aged care, disability and home support.

As a result of the settlement, the hourly rate for care and support workers will rise to a minimum $19 an hour from July 1 and to, depending on experience and qualifications, between $21.50 and $27 an hour from July 2021.

The pay rise will be funded through increases in the health and ACC budgets, which means employers of those benefiting from the deal won't have to hike their charges to cover wage increases.

The Northland District Health Board's Neil Beney said about 2000 support workers in the region would benefit from the pay rise, excluding disability support and ACC funded clients.

Lote Challender is one Northlander who will benefit as his hourly pay will increase from just over the minimum wage of $15.75 to $19 from July 1.

The 25-year-old Whangarei man had been thinking of changing his present job of working for IDEA Services which is part of Intellectually Handicapped Children (IHC) New Zealand.

"This job is very draining mentally and psychologically. I have already given this job six years and was thinking of perhaps going into more studies or doing something else but I may not now given the wage increase," he said.

Mr Challender said news of the pay rise came as a surprise to him but he was happy the effort of carers was being recognised by getting an hourly rate that was more liveable.

Rest homes in Northland welcomed the pay increase, saying it was long overdue.

"We think the pay increase is great news for our caregivers, they do a fantastic job looking after our residents. They will be delighted, and rightly so," said Simon Challies, managing director of Ryman Healthcare which runs Jane Mander Retirement Village in Kamo.

He said 87 caregivers at his retirement village would benefit from the negotiated settlement.

Chief executive of Kerikeri Retirement Village, Hilary Sumpter, said between 80 and 90 of the 130 staff would receive a pay rise from July 1.

"What the deal also means is caring for the elderly will become a viable career option and will keep people in the sector for longer, apart from the ripple effect on Northland's economy," she said.

John Wade, owner of Norfolk Court Home and Hospital in Dargaville, said the wage increase was "well overdue" and was a fair recognition of the work those employed in those sectors did.