Minimum wage pay rise for aged care workers

The recent decision of the Full Bench of the Fair Work Commission (FBFWC) on 21 February 2023 considered three applications to vary modern awards and increase the minimum wages of aged care sector workers (the Applications) under section 158 Fair Work Act 2009 (Cth) (the Act). The Applications related to the following modern awards:

• Aged Care Award 2010 (Aged Care Award);
• Nurses Award 2010, now the Nurses Award 2020 (Nurses Award); and
• Social, Community, Home Care and Disability Services Award 2010 (SCHADS Award).

(collectively the Modern Awards)

The FBFWC considered the Applications in two stages. At the conclusion of stage one, the FBFWC was convinced that the evidence proved the existing minimum wage rates under the Aged Care Award, Nurses Award, and SCHADS Award were not adequate to properly compensate workers who were engaged in direct care to aged persons. This included either in residential facilities, or in home settings.

Stage two of the FBFWC determination considered the timing of increases to these minimum wages. An important consideration was whether the increase to minimum wages under the Modern Awards would be necessary to meet the objectives of the Modern Awards. At the conclusion of Stage two, the FBFWC determined that the increase to minimum wages under the Modern Awards was in fact necessary to achieve their objectives.

Despite making this determination, the FBFWC noted that this increase for direct aged care workers would not conclude the FBFWC’s consideration of the unions claim for a 25% increase for other employees, in particular administrative and support aged care employees. 

What is the pay rise?

The FBFWC determined the minimum wages under the Modern Awards needed to increase by 15%. This increase was described by the FBFWC as being “plainly justified by work value reasons.”

The FBFWC considered the Act and the current national minimum wage to determine that the minimum wage under the Modern Awards for workers engaged in direct aged care were insufficient to achieve the objectives of the Modern Awards and the Act, and did not accurately reflect the work conducted by these employees.

The 15% increase to the minimum wage will take effect from 30 June 2023.

Who are classified as “direct care” workers?

The FBFWC considered who the increase would apply to under these Modern Awards. Specifically, it was decided that the increase will apply to “direct care workers in aged care”, which includes the following roles:

• registered nurses under the Nurses Award
• enrolled nurses under the Nurses Award
• assistants in nursing under the Nurses Award
• nurse practitioners under the Nurses Award
• personal care workers under the Aged Care Award
• home care workers in aged care under the SCHADS Award
• health care workers

What is the SCHADS Award?

The SCHADS Award covers various employers in the social and community services sector. This can extend to charities, not-for-profit organisations, and National Disability Insurance Scheme providers. It covers employers in the:

• crisis assistance and supported housing sector
• social and community services sector
• home care sector
• family day care scheme sector

What is the Aged Care Award?

The Aged Care Aware covers employers in the aged care industry and employees who fall within the classifications of Clause 14. Under Clause 14 employees may include:

• aged care workers
• cooking apprentices
• gardening apprentices
• adult apprentices

What is the Nurses Award?

The Nurses Award covers employers in the health industry and the following classified employees identified in Schedule B:

• nursing assistant
• nursing care
• student enrolled nurse
• enrolled nurses
• registered nurses
• occupational health nurses
• nurse practitioners

Next steps for employers and employees

It is important to understand the obligations this increase will impose on employers who operate within these Modern Awards.

As an employer, it will be necessary to review the current minimum wage of any employees that fall within these Modern Awards and who provide direct care to aged care patients. These employees must see an increase to their minimum wage payment of 15% by 30 June 2023.

As an employee within the Modern Awards that provides direct care to aged care patients, it is important to understand your legal entitlements.

If you require further advice or are unsure of your entitlements under this new change the Workplace Relations team at Coulter Legal can assist you. Contact us today.