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Tuesday, August 9, 2022

New financial year will provide small gains for workers, as providers lament worsening financial prospects

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The new financial year will come with added government supports for the country’s lowest paid workers, whilst aged care providers lament that they have been left behind.

Up to 2.8 million workers will see increased pay packets hitting their bank accounts after the independent commission awarded minimum wage earners an inflation-levelling 5.2 per cent increase, effective as of today.

It amounts to an extra $40 a week for minimum wage workers in sectors such as aged care, retail trade, social assistance, accommodation and food services.

Workers will also see a boost to their superannuation contributions as the new financial year brings key policy changes.

From Friday, the guaranteed superannuation rate will rise from 10 to 10.5 per cent; by 2025 the Government has pledged this will rise to 12 per cent.

The start of the 2022/23 financial year will also see more workers eligible for superannuation payments, regardless of how much they earn. 

The removal of the $450 monthly eligibility threshold is expected to result in hundreds of thousands of Australians being better off in retirement.

This is especially pertinent for aged care workers who, commonly working multiple casual roles across different employers, were previously missing out on superannuation contributions as earnings failed to exceed the minimum threshold.

As Aged Care News has reported, this inability to accumulate super has put a number of workers — particularly single women — at a disproportionate risk of homelessness in their retirement years.

An increase to the home care package subsidy will also take effect, but industry groups say more help is needed, as the 1.7 per cent rise in subsidies fails to exceed the rate of inflation, which is in excess of 5 per cent.

Giovanni Siano, owner of Geelong home care provider Home Instead, says that this indexation rate will fail to keep up with the rising costs of providing in-home care.

“It’s disgraceful, very disappointing,” he said.

“I would love to know the rationale behind this as there is a clear discrepancy which will leave many people in our community in a vulnerable position.”

Paul Sadler, interim CEO of the Aged Care and Community Care Providers Association, says that inflation, coupled with new changes to the Social, Community, Home Care and Disability Services Industry Award 2010, mean that many providers are expecting cost increases of up to 20 per cent this financial year.

“Clients and staff could experience disruption for some months as providers work through solutions with clients and their staff, but there must be clear communication with clients in particular before any changes are made and agreed to,” he said.

Sadler added that increases to aged care workers’ pay is ideal, but questioned the viability without equal increases to government subsidies.

“It can’t come at the expense of older Australians getting the care they need or to the point where providers have no choice but to cease operating because of the increase in costs and the restriction on their ability to adjust their prices accordingly.”

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