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Update regarding the Workforce Compact and Workforce Supplement

04 Apr 2013

As many providers would be aware, as part of the Living Longer Living Better reforms, last year the Federal Government announced certain initiatives aimed at addressing workforce pressures in the Aged Care sector. These initiatives included the negotiation of a Workforce Compact (Compact) and providing funding for providers that meet the requirements of the Compact (Supplement).

In March, Minister Butler announced the terms of the Compact and the requirements that providers will need to meet in order to be eligible for the Supplement.

Eligibility requirements

Essentially, in order to be eligible for the Supplement, providers will need to:

  • take part in the Department of Health and Ageing’s regular Aged Care Workforce Census and Survey; and
  • meet the terms and conditions of the Compact.

For providers with 50 or more operational places, the terms and conditions of the Compact will need to be met / reflected in an enterprise agreement (EBA).

For providers that do not already have an EBA in place that covers their aged care employees, this means that they will need to negotiate an EBA (and have it approved) in order to be eligible for the Supplement.

For providers that already have an EBA in place covering the relevant employees, they will need to negotiate a new EBA or a variation to the existing EBA, if the existing EBA is not consistent with or does not meet the terms and conditions of the Compact.

Providers with fewer than 50 operational places will not need to have an EBA, but will need to certify that their terms and conditions of employment are consistent with and meet the terms and conditions of the Compact.

What terms and conditions are required under the Compact?

In summary, in order to meet the requirements of the Compact, providers will need to:

  • pay a minimum margin over applicable award rates (these margins range between 1.5% and 12.60% depending on the type of employee and the relevant year);
  • provide wage increases of at least 2.75% per annum; and
  • make certain commitments in respect of training, professional development, representation leave, reviewing part-time hours, casual conversion, workload management, workplace health and safety and disciplinary procedures.

How much is the Supplement?

The Supplement is calculated as a percentage of the amount of the basic subsidy/funding agreement per resident. The percentages are as follows:

2013-14 1.00%
2014-15 2.00%
2015-16 3.00%
2016-17 3.50%

When do we get the Supplement?
For providers that receive the Supplement, they will be required to pass on the funds as additional wage increases to applicable aged care employees. This equates to an additional wage increase of at least 1.00% between 1 July 2013 and 30 June 2016, and 0.50% from 1 July 2016.

Subject to meeting the relevant eligibility requirements, providers will be eligible for the Supplement from as early as 1 July 2013.

What do we need to do?

There are a number of aspects of the Supplement and the Compact that are still unclear (including the process for applying for the Supplement and the detail of some of the non-wages related aspects of the Compact). The Department of Health and Ageing has indicated that it will release further information and guidelines in relation to the Supplement and Compact shortly so providers should keep an eye out for this information.

In the interim however, providers can prepare for these changes by:

  • auditing their existing employment arrangements and ascertaining what, if any, changes they will need to make in order to meet the terms of the Compact (and in turn access the Supplement); and
  • assessing the cost/benefit of meeting the eligibility requirements for the Supplement (which will in turn assist providers to determine whether or not to apply for the Supplement).

The Aged Care and Workplace Relations teams at Hynes Legal can assist your facility to undertake these steps.

Where to get more information

More information regarding these initiatives can be obtained from the dedicated webpage within the Department of Health and Ageing by clicking here.

Alternatively, you can contact Kristin Ramsey or Julie McStay if you would like advice particular to your organisation.