Aged Residential Care Provider Newsletter
26 May 2017
This newsletter is designed to assist Aged Residential Care (ARC) providers in implementing the Care and Support Workers (Pay Equity) Settlement. We are sending these newsletters out every week to reiterate key messages; provide updates on ongoing processes; and provide information on upcoming events.
This edition outlines recent implementation activities and developments including:
· Key messages
· Key dates
· What’s happening this coming week
· Legislation
· Residents’ increase
· Qualifications update
· Ratification
· Information sessions
· Data collection reminder
· Some ARC providers need to complete two data collection tools
· Data collection privacy principles
· Frequently asked questions
· Contact the pay equity implementation team
Key messages
On 18 April 2017, the Government announced a $2 billion pay equity settlement for 55,000 care and support workers in New Zealand’s aged and disability residential care and home and community support services.
From July 1, workers will receive a pay rise between 15 and 50 per cent depending on their qualifications and or experience. The settlement means over the next five years, the workforce will see their wages increase on a range between $19 and $27 per hour.
The Care and Support Workers (Pay Equity) Settlement Bill was introduced to Parliament on 25 May.
This means providers have a legal obligation from 1 July to ensure employees receive their increased wages in the first pay day from their employer (i.e. weekly or fortnightly, depending on their normal pay run).
A copy of the Settlement Agreement can be found on the Ministry’s website: http://www.health.govt.nz/system/files/documents/pages/care-support-workers-pay-equity-settlement-agreement-signed-8may17.pdf.
Implementation approach
The Operational Policy Document, which provides detailed guidance on the implementation of the Settlement Agreement, is available on the Ministry’s website.
In order for providers to commence payment to qualifying employees from 1 July 2017, a process to pass additional funding to providers is required. In the Aged Residential Care sector, for most services this will be done by an increase to the prices paid for those services.
For the national ARC contract, there will be an increase to the price paid for the ARC nationally contracted services (rest home, hospital, dementia and psycho geriatric). This will be delivered through the usual annual national ARC contract process and DHBs will communicate the process and timeframes for this through the usual communication channels. Providers should refer any questions on this process to their industry association body or DHB Central TAS.
For other services paid at a bed day rate (e.g. facility-based respite care), the pay equity settlement payment will also be made by increasing the prices paid for those services.
Key dates
· By 31 May: Claim forms for employee attendance at union ratification meetings are to be submitted to the Ministry, please download the form here: http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equity-settlement/pay-equity-settlement-information-providers. Ratification claims received by 31 May will be paid on 20 June 2017. For ratification claims received after 31 May the Ministry will aim to process them within 10 business days but no earlier than 23 June 2017.
· By 2 June 2017: ARC providers must submit completed Workforce Translation Tools.
· By 1 July 2017: Legislation will be progressed through Parliament to give effect to the Settlement Agreement and ensure the new wage rates are passed onto workers from 1 July.
· From 1 July 2017: Providers have a legal obligation to ensure employees receive their increased wages in the first pay day from their employer (i.e. weekly or fortnightly, depending on their normal pay run).
· From 1 July 2017: Providers will advise funders that they have commenced making payments to employees. Unions will also play a role in ensuring that employees have received the new wages.
What’s happening this coming week
The focus for ARC providers over the coming week should be on collecting and submitting data, gathering staff qualification information, preparing claim forms for employee attendance at union ratification meetings, contacting pay roll providers and reviewing the Ministry’s frequently asked questions on the Settlement.
Legislation
The bill to give effect to the Care and Support Worker (Pay Equity) Settlement Agreement passed its first reading in Parliament on 25 May with unanimous support.
The bill enshrines the new pay rates in law and ensures providers pass on the $2 billion of wage increases over five years to the 55,000 workers in aged and disability residential care, and home and community support services around the country.
The introduction and first reading of this bill is a significant milestone in the implementation of the settlement, following Cabinet approval in April and signing of the agreement in early May.
The bill has been sent to the Health Select Committee and is due to be reported back to Parliament by 6 June 2017. Submissions requests will be sent directly to groups and individuals.
The bill must be fast-tracked through Parliament to ensure it is passed by 1 July.
More information on the settlement is available at on the Ministry of Health website at: www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equity-settlement
Residents’ increase
The Settlement, which increases the wages paid to aged care workers, will result in a higher annual cost for aged residential care from 1 July 2017.
When we announced the settlement in April we signalled that the 11,070 residents who pay the maximum contribution towards the cost of their care will face increases on 1 July.
The precise amount is being determined as part of annual national aged care contract negotiations between representatives of DHBs and providers. This will be gazetted at the end of June and communicated with providers, aged care residents and their families, and interested parties shortly. We expect the total increase will be between 9 and 10 per cent which includes the separate annual increase for standard cost pressures.
We recognise the price increase will be sharp, however it reflects the true cost of providing this care.
The pay equity settlement will also have additional benefits for the quality of care for residents in aged care facilities with reduced staff turnover and caregivers with more skills and qualifications.
A higher aged residential care cost as a result of the Settlement does not represent a barrier to accessing care. The impact for these residents of paying a higher cost for their care is that their assets will reduce to the threshold level faster, at which point the Government funds the full Settlement costs.
The Ministry, DHBs, providers, and consumer representatives are also undertaking a funding model review for aged residential care over the next year. One of the things the review will look at is how to provide incentives to keep future cost increases to a minimum.
Qualifications update
The industry training organisation, Careerforce, is reviewing qualifications recognised by the New Zealand Qualifications Authority for relevance to the work undertaken by care and support workers and equivalent Level on the NZQF. As qualifications are assessed relevant and equivalent they will be posted on the Careerforce website: https://www.careerforce.org.nz/pay-equity/equivalencies
The qualifications under review include those forwarded by employers.
If a qualification is not on the Careerforce list, translation will be based on length of service with the current employer.
If, following assessment by Careerforce a qualification is added to the list, eligible workers may move to a higher band on the payscale and be entitled to back pay to 1 July 2017.
Registered nurses
If New Zealand trained enrolled or previously registered nurses are working as care and support workers, they should be translated to Level 4 on the new pay scale.
The Ministry is working with Careerforce to determine how best to assess the relevance of other qualifications higher than Level 4 on the New Zealand Qualifications Framework, for the purpose of transition of existing care and support workers to the new pay scale from 1 July 2017.
Ratification
The ability of all care and support workers (union members and non-union members) to have the opportunity to vote in the ratification process for the Care and Support Workers (Pay Equity) Settlement Agreement is fundamental to the settlement. The Ministry of Health is supporting the implementation of the ratification process and in good faith encourages all employers to comply with this process.
Although the Care and Support Workers (Pay Equity) Settlement Bill has now passed its first reading in Parliament, the ability of all care and support workers to vote in the ratification process remains important.
The Government will reimburse employers for wages at the rate of $25 per care and support worker verified by the union and the employer as having attended a ratification meeting. Claim forms must be submitted to the Ministry, please download the form here: http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equity-settlement/pay-equity-settlement-information-providers.
Ratification claims received by 31 May will be paid on 20 June 2017. For ratification claims received after 31 May the Ministry will aim to process them within 10 business days but no earlier than 23 June 2017.
Information sessions
This week, the pay equity implementation team held information sessions around the country in Auckland, Hamilton, Wellington, Christchurch, Dunedin and via teleconference.
Thank you to those who attended. The slides from these information sessions will be made available on the Ministry’s website soon.
Data collection reminder
The Workforce Translation Tool should be completed by all ARC providers by 2 June. It can be downloaded from: http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equity-settlement/pay-equity-settlement-information-providers/pay-equity-settlement-aged-residential-care
The Workforce Translation Tool is being used because:
· The tool helps providers to work through eligibility and translation in order to make changes in their payroll systems
· The Ministry needs to provide assurance to Ministers that providers will be in a position to accurately pay eligible employers the correct rates from 1 July.
· The Ministry needs to provide government with information about the outcomes and benefits of its investment to settle historic pay equity claims for care and support workers: this means the Ministry must be able to conduct workforce analysis to provide an accurate picture of the care and support workforce, and monitor changes over the course of the settlement period. This includes changes to the workforce’s size, makeup, stability and qualifications.
The data collection and submission process
The data collection and submission process for providers consists of the following steps:
- Download the Workforce Translation Tool from the following Ministry of Health webpage: http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equity-settlement/pay-equity-settlement-information-providers/pay-equity-settlement-aged-residential-care
- Review the Workforce Translation Tool in correspondence with the guidance document in Section 7. Please contact the Ministry on as soon as possible regarding any questions or clarifications.
- Complete the tool using payroll reports for the eligible workforce as at 1 May 2017.
- Upload the tool to this website: http://tinyurl.com/MoH-NZ-PE1
The Workforce Translation Tool must be uploaded by Friday 2nd June. Providers will need to enter their contact information when they upload their completed submission.
The central implementation team may contact you should there be any need to clarify your data submission.
Support is available
A central Ministry team will be actively working with providers to help them with completing the Workforce Translation Tool. Where providers are unsure they will meet the 2 June deadline they need to flag this as soon as possible with the team at or on 0800 855 066 so they can proactively work with providers.
As questions are answered these will be updated in the Q&A section of this document and/or via the Ministry website http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equity-settlement
Some ARC providers need to complete two data collection tools
Some ARC providers need to complete two data collection tools. This is for providers that may also provide services eligible for funding related to the Care and Support Workers (Pay Equity) Settlement that are not part of the ARC national contract, or another service paid at a bed day rate, such as facility-based respite. These additional services may be Home and Community Support Services, or Community and Residential Living (Day Programmes). We have contacted these providers directly.
Data collection privacy principles
Before requesting any information, the Ministry assessed the proposed data collection information fields against all twelve information privacy principles in the Privacy Act. In doing so, the Ministry identified key risks and developed appropriate risk responses. This information is included in the short-form Privacy Impact Assessment (PIA), which is published on the Ministry website: http://www.health.govt.nz/new-zealand-health-system/care-and-support-workers-pay-equity-settlement/pay-equity-settlement-information-providers
Frequently asked questions
1. What should a provider do if the calculated pay rate from 1 July 17 is lower than the current pay rate at 1 May 17?
The rate shown under the column titled '18. Pay rate at 1 July 17' in the Workforce Translation Tool represents the translated rate for an employee based on either years of service or qualifications (whichever, yields the higher rate). This rate only becomes the employees new rate from 1 July 17 provided it is greater than the employee's current rate as shown under the column titled '16. Current Pay Rate at 1 May 17'. In situations where the 'Pay rate from 1 July 17' is lower than the 'Current Pay Rate at 1 May 17', the employee's pay rate should not be altered as of the 1 July 17.
2. What services is the Data Collection Tool required for?
Home and Community Support Services and/or Community and Residential Living Services.
3. What services is the Workforce Translation Tool required for?
Please include all employees working on a contract eligible under the Settlement - whether an ARC national contract service or a Home and Community Support Service.
4. What about an employee’s other conditions of employment?
Generally, all other conditions of employment remain the same. However, service and qualification allowances will be extinguished because they have been replaced by the new qualifications-based pay structure. Weekend and night penal rates in employment agreements will remain but those that are calculated as a percentage of base pay will be converted to allowances.
5. How do I know if certain workers and/or certain services are eligible?
A multi-step decision process needs to be used to assess eligibility of any particular worker: