Rest homes face clo­sure

A land­mark pay vic­tory for work­ers could force fa­cil­i­ties to close, write Brit­tany Baker and David Bur­roughs.

Sunday Star-Times - - NEWS - June 25, 2017

Independent rest homes say they could be forced to close when a land­mark deal for in­creased wages for el­derly care work­ers comes into ef­fect this week.

From Satur­day, about 55,000 work­ers in aged res­i­den­tial care will re­ceive pay in­creases from around $16 an hour to be­tween $19 and $23.50, in what has been hailed as a vic­tory for low-in­come work­ers in the sec­tor.

But dozens of homes say they will strug­gle to cover ex­tra wages.

The $2 billion set­tle­ment will be funded over five years through an in­crease of $1.9 billion the Min­istry of Health’s bud­get and $192 mil­lion from ACC, with em­ploy­ers ex­pected to con­trib­ute the re­main­ing $245m.

But the man­ager of the Opunake Cot­tage Rest Home, the sole fa­cil­ity for 100km along the Taranaki coast be­tween Haw­era and New Ply­mouth, said the $2000-a-week in­crease to their weekly wage bill could spell the end for the 25-yearold busi­ness.

Anne Woods said: ’’I had to tell (staff) we are ac­tu­ally in a re­ally dire po­si­tion at the point now where we need to look to at­tract more res­i­dents or shut’’.

‘‘They were ob­vi­ously down. A cou­ple of peo­ple said im­me­di­ately, ‘can we not have our pay in­crease? I’d rather have a job than $23 an hour for six months’.’’

Most of their 18 care­givers had been em­ployed for at least a decade, with some hav­ing been em­ployed for more than 20 years.

The sit­u­a­tion in Opunake is mir­rored around the coun­try.

In Coun­ties Manukau, Glen­brook Rest Home owner and man­ager Peter Mathyssen con­ducted an in­for­mal sur­vey, and of the 30 rest homes that re­sponded, 90 per cent said their ex­tra fund­ing wouldn’t cover the ex­tra wages.

Mathyssen said care­givers de­served the higher pay for the tough work they dobut added he was wor­ried the higher wages could en­cour­age rest homes to hire lessqual­i­fied staff to com­bat in­creased costs.

Gay­lene Rielly, who man­ages Ben­haven Rest Home in Up­per Hutt, said res­i­dents could face re­duced ser­vices as a re­sult.

‘‘It is go­ing to be a strug­gle. It would be in any fa­cil­ity, but the level of care could be com­pro­mised,’’ she said.

Sam Jones of union E tu said they pushed hard for ap­pro­pri­ate fund­ing in the set­tle­ment and there should be no ex­cuse for cut hours or clo­sure.

He said if rest homes are fac­ing clo­sure, then a short­fall ‘‘must have al­ready been there’’ as wages should have no real im­pact.

But Si­mon Wal­lace, the New Zealand Aged Care As­so­ci­a­tion’s chief ex­ec­u­tive, dis­agreed.

In a re­cent sub­mis­sion to the Health Select Com­mit­tee, he said the fi­nan­cial pres­sure pushed onto smaller oper­a­tions would lead to clo­sures, re­dun­dan­cies and fewer op­tions for an age­ing pop­u­la­tion.

An un­named rest home in the Waikato would close, while oth­ers in Taranaki and Welling­ton were also weigh­ing up their op­tions.

‘‘A larger 80-bed fa­cil­ity in Hamil­ton is likely to make care­givers re­dun­dant in or­der to cut its losses and stay open.’’

The Min­istry of Health’s deputy di­rec­tor of ser­vice com­mis­sion­ing Ke­ri­ana Brook­ing said there should be no sur­prise in short­falls as providers had agreed to the frame­work and were well aware of any down­sides.

‘‘In those dis­cus­sions with DHB rep­re­sen­ta­tives, they con­sid­ered the pros and cons of build­ing pay eq­uity in­creases into the bed-day price,’’ she said.

‘‘It was jointly de­cided to process on that ba­sis. This de­ci­sion ex­plic­itly recog­nised it would re­sult in ‘overs and un­ders’. As a re­sult, providers and DHBs have agreed to hold a fund­ing review.’’

A date for the review has yet to be an­nounced.

Dis­trict health boards were un­able to say how or when rest homes would re­ceive any ad­di­tional fund­ing to re­main op­er­a­tional as they are bound by a na­tional process, which de­ter­mines all fund­ing guide­lines.

Un­til a res­o­lu­tion is found, Brook­ing sug­gests providers and DHB fun­ders ‘‘work closely to­gether where there are con­cerns for provider vi­a­bil­ity and ser­vice con­ti­nu­ity’’.


Re­becca Monti, care­giver at Opunake Cot­tage Rest Home, is wor­ried for the res­i­dents she calls fam­ily, such as Es­ther Mc­Call.

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