Policy or pay: aged care workforces could climb back through retiree reform

Key points:

• Unions are pushing for an extra 10 percent pay rise for aged care staff on top of the already-awarded 15 percent pay rise

• A recent report by the Commonwealth Committee for Economic Development estimated the need for at least 17,000 more direct aged care workers each year in the next decade

• HammondCare Chief Executive Officer Mike Baird said that eliminating the pension penalty could incentivise people to fill employment gaps in the aged care sector

Australia’s ageing economy has been a concern for policymakers and care providers alike, as they have sought to address workforce shortages and rates of retention throughout the sector.

Like a row of dominoes, Cameron Fancourt, Zonda Group’s director, said that recent attempts to incentivise people to join the aged care workforce have worked, but have also created other shortages in the care industry.

“This is a seismic shift across the Australian healthcare landscape,” Mr Fancourt said, referring to the 15 percent pay rise for aged care staff that came into effect on July 1.

“You can’t blame healthcare professionals for seeking out higher wages in the aged care sector, which was long overdue, but this exodus from acute care could create a serious void in our hospitals.

“We’ve been dealing with this exodus on a daily basis since the pay rises were announced and it’s being compounded now by serious cost-of-living pressures.”

The director cited a 2023 study from the Australasian College of Emergency Medicine that found there were significant gaps in emergency department workforces, with a workforce shortage of 28 percent in specialist trainee roles and 30 percent for junior medical officers across Australia.

To address these shortages, HammondCare Chief Executive Officer Mike Baird said that retirees could be an untapped pool of potential new recruits, if not for the Age Pension penalty.

The CEO said pensioners would lose approximately 50 cents of their fortnightly pension for every dollar earned over the income threshold. Working too much over consecutive fortnights could lead to the pension quickly reducing and reinstating the pension is never as quick.

“Given that the aged care sector is crying out for workers, while also facing an upcoming tsunami of demand, I believe it’s high time we make it easier for older workers to step back in from retirement,” Mr Baird said.

With 42 percent of Australians returning to the labour force after retiring because of ‘financial needs’ — Mr Baird’s message was met with applause at the Aged and Community Care Providers Association National Conference 2023, held in Adelaide on October 25 – 27.

“Apart from ageism and sometimes a need to upskill, especially digitally, the bigger ones are the pension and superannuation rules,” the former NSW Premier said.

“One solution could be to exempt employment income completely for aged care workers  — and other sectors that have a critical workforce shortage — from the Aged Pension [sic] income test,” he said.

The HammondCare CEO’s sentiment was echoed by that of the Zonda Group director.

“Aged care plays an essential role in our healthcare system, but we must ensure that the expertise and experience built in acute care are not lost. It’s a delicate equilibrium which must be maintained,” Mr Fancourt said.

“As specialists move to aged care for pay rises, our emergency rooms and [intensive care units] face the risk of understaffing. 

“Physicians, nurses and support staff who have long been the backbone of critical care units are now looking to shift into a domain that promises not only financial rewards but also a perceived respite from the high-stress environment of the ICUs and [emergency rooms].”

Both expert opinions mirror concerns of aged care and care sector advocates upon release of the latest Intergenerational Report, which found that the national paid workforce participation rate was expected to dip from 66.6 percent to 63.8 percent by 2063.

Do you believe that retirees could be the key to getting Australia’s aged care sector back on track? Let the team at Talking Aged Care know and subscribe to the newsletter for more informative content.