Health care workers set to share $2 billion

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New Zealand’s lowest paid health care workers are set to share more than $5 billion over the next five years after the government confirmed a historic pay equity settlement yesterday afternoon.

“This settlement recognises the work carried out by the 55,000 workers in our aged and disability residential care, and home and community support services across the country,” said health minister Jonathon Coleman.

From July 1, healthcare workers will receive a pay rise between around 15 and 50 per cent depending on their qualifications and or experience. The funding boost will eventually see wages increase to between $19 and $27 per hour.

“For the 20,000 workers currently on the minimum wage of $15.75 per hour, it means on July 1, they will move to at least $19 per hour, a 21 per cent pay rise,” Coleman confirmed. “For a full-time worker, this means they will be taking home around an extra $100 a week, which is over $5,000 a year.”

Existing workers will be transitioned to positions on the new pay scale which reflect their skills, and their experience. For new workers employed after July 1, wages will be based on an individual’s level of qualifications.

A care and support worker on the minimum wage with three years’ experience and no qualifications will receive a 27 per cent increase in their hourly wage rate moving from $15.75 to $20 per hour from July 1. That rate would progressively increase to $23 by July 2021 and would rise further if they attain a higher qualification.

According to Coleman, the $2.048 billion settlement will be funded through an increase of $1.856 billion to Vote Health and $192 million to ACC. ACC levies are set for the coming years, but may possibly increase over the next decade to support this. However, that is not definite.

There may also be an increase in costs for people in aged residential care facilities, whose assets keep them above the subsidy threshold. This will be determined through the annual Aged Residential Care contract negotiations.

“To ensure the pay rises happen in the agreed manner, I will be introducing legislation to Parliament shortly,” said Coleman, who thanked employers for their future cooperation in implementing the new pay scheme.

“Home and community support, disability and aged residential care workers are widely seen as amongst the most deserving of recognition as a pay equity case,” he added. “It is an historic moment for the government to address this undervaluing with Ms Bartlett and the unions.”

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