The federal government has requested landmark pay rises for aged care workers ordered by the Fair Work Commission (FWC) be phased over the next two years, citing concerns including that “large one-off wage increases” could fuel employment shortages across other sectors.

Last month, the FWC awarded an historic wage rise of up to 28.5% for direct care workers, including Assistants in Nursing (AINs)/Personal Care Workers (PCWs), in its Stage 3 decision of the ANMF’s Aged Care Work Value Case. It concluded that, for ‘work value reasons’, award rates for direct care employees should be substantially increased beyond the 15% initial boost determined in Stage 1.

However, in a submission to the FWC last Friday, the government, which maintains it is fully committed to funding the wage increases for direct and indirect aged care workers, proposed a staggered implementation over coming years.

Specifically, it is seeking to fund 50% of the Stage 3 wage increases for direct care workers from January 2025, and the remaining 50% from January 2026. Under the proposal, indirect care workers including cleaners and administration, will receive the full increase from January next year.

The government’s submission only deals with direct and indirect aged care workers who are part of the Stage 3 wage increases and not registered nurses (RNs) and enrolled nurses (ENs), with the FWC deferring further pay rises for these aged care nurses as a separate application made by the ANMF for all employees covered by the Nurses Award is considered.

In its submission, the government identified numerous reasons why it believes the wage increases should be phased.

Pointing to prevalent employment shortages across the country, including in roles such as hospital nurses, disability carers and childcare workers, the government argued it considers it “prudent” to adopt a phased approach instead of funding large one-off wage increases, claiming it could draw workers away from other sectors who face similar employment shortages.

It said the move would help improve its budget position, and highlighted that direct care workers received a “substantial additional wage increase” of 15% relatively recently.

“The Commonwealth funding commitment has been made in the context of its fiscal strategy, which is focused on improving the budget position in a measured way, consistent with the overarching goal of reducing gross debt as a share of the economy over time, while seeking to deliver relief from cost-of-living pressures without adding to inflation,” the government submitted.

The FWC will now consider if it accepts the government’s push to phase the wage increases. Notably, when the FWC ruled a 15% pay rise for aged care staff, the government wanted to phase it out over 12 months, yet, the commission ordered the government pay the increase in full by June 30, 2023.

The Aged Care Work Value Case was launched by the ANMF and other unions in 2020 to seek a pay rise of at least 25% for aged care workers on the basis that work in the sector has been historically undervalued for gender-based reasons.

“ANMF witnesses including our members, union officials and academic experts, all gave evidence that the work performed in aged care has changed dramatically over the last two decades,” said ANMF Federal Secretary Annie Butler, following last month’s FWC ruling.

“Our evidence that the work has become more complex due to the higher needs and greater acuity of aged care residents and people receiving care at home was accepted.”

“We look forward to progressing our second application so we can achieve the best outcomes for our members across the nursing workforce.”