Rest homes struggle with wage hike for care workers

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

Small rest homes may struggle to keep their doors open and some elderly will burn through their savings faster with new changes a week away.

The 55,000 workers in the aged-care and support sector will receive pay rises to between $19 and $27 per hour over the next five years. On July 1 workers currently on the minimum wage of $15.75 per hour will move to at least $19 per hour.

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

But care facilities will have to pick up the remaining tab.

Peter Mathyssen and Sharon Jordan, who have run Glenbrook Resthome for 10 years, could be out of pocket over $20,000 a year after the Pay Equity settlement comes into force. Photo / Supplied

Peter Mathyssen and his partner Sharon Jordan, who have run Glenbrook Resthome for 10 years, will be out of pocket thousands of dollars a year.

Mathyssen said the wage costs for their 20 staff would go up $78,500 a year to a total of $553,500. The Government would subsidise this by paying $9.41 per day per resident.

But they only get this on days when the bed is full, despite having to provide consistent hours for staff.

If the 22-bed rest home was full they would lose $3000 a year. Currently they have six beds empty which, if it continues, will leave a shortfall of $22,500 a year.

"We are supposedly a private enterprise but what we can charge is capped by the Government, then the Government is saying 'this is how much you have to pay your staff'.

"We can't cut costs or increase our income to cover it. It's not right... We can't afford that."

Mathyssen said the rest home had never been a money-making venture and he and Jordan worked 12-hour days, seven days a week.

"We survived just because we work long hours - I do the admin, maintenance, I'm the caretaker, gardener and I get called out at night when someone falls. Sharon is a nurse and clinical manager... We have to be everything."

Mathyssen supported the pay increase for aged-care workers but believed the Government should subsidise it further. He said it disproportionately affected smaller rest homes as the large ones had economies of scale and lucrative retirement villages attached.

Aged facility residents who own assets over the $224,000 subsidy threshold will face a 10 per cent increase in their payments from July 1. Residents who own less than the threshold will continue to get their care covered by the Government.

Auckland man Phillip Morris' elderly parents will be paying an extra $200 a week between them for the care they receive at Selwyn Village.

Morris said while this would eat into his parents' savings faster they also appreciated the great standard of care they received. He said their assets would be below the subsidy cap in three or four years and then they would get fully-funded care.

"It's disappointing. They've saved all their lives, paid taxes all their lives but don't get the benefit of holding on to their assets.

"But we can't quibble about the care that they get. The family as a whole is happy.

"It's their money, it's not our money."

There are 673 aged-care facilities for New Zealand's 32,500 rest home residents. About half of these facilities have less than 50 beds.

Care Association New Zealand committee member Jessica Buddendijk wanted the Government to fully fund the change. She's 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."

Aged-care providers will receive a daily amount between $9.41 and $16.18 per client from the Government depending on the level of care needed.

Ministry of Health spokeswoman Jill Lane admitted that this would result in "overs and unders". As a result providers and DHBs will hold a funding review.

"The settlement relieves a significant amount of wage pressure which providers would otherwise have had to manage over the next five years. Providers also receive the benefits of lower staff turnover due to increased wages and a more capable and skilled workforce through access to training and qualifications.

"If we see problems, the Ministry will work in partnership with providers and DHBs to resolve them."

A Selwyn Foundation spokeswoman said they welcomed the pay equity settlement but were concerned "about the implications of the settlement for other staff roles".

"We're still working through this detail and will keep our staff informed as things progress and as more information becomes available about the differing rate increases and their practical application across our business."