The Aged Care Minister, Senator Richard Colbeck, faced accusations of ‘broken promises’ and misleading providers and staff this week after it was revealed the Government had backtracked on plans not to tax a $235 million bonus to be paid to direct care workers in residential care and home care during the pandemic.
The Minister had announced on 20 March – over eight weeks ago – that the payments would see residential care workers paid up to $800 after tax, while home care workers would take home up to $600 after tax, over two quarters in July and September to “guarantee the continuity” of the workforce during COVID-19.
But under the guidelines for the bonus – released late on Friday before the Queen’s Birthday long weekend in many states – the payments will be subject to income tax when paid to the employee.
Providers will also have to apply for the bonus under a Government grant scheme, adding more red tape to a system that is already burdened by paperwork.
Payments not available to other key aged care staff
The aged care peak bodies labelled the move “mean-spirited and misleading”, estimating that aged care staff will lose over 30% of their payment or more.
The peaks have also been critical of the fact that the payment is not available to laundry workers, cleaners, cooks, drivers and reception staff – who make up a large proportion of the aged care workforce.
We asked the Government about the payments, and they confirmed there are no plans to change the eligibility arrangements.
“The retention bonus … is income and as such is subject to income tax. This is consistent with other COVID-19 measures, such as JobKeeper,” a Department of Health spokesperson told us.
Government has misunderstood impact on staff
Providers we have spoken to are deeply disappointed by both the taxing of the payments and the decision not to extend the scheme beyond direct care staff.
They say the Government has misunderstood the impact this will have on the workforce by not appreciating that every member of staff plays a significant role in the provision of care and support to residents.
We must agree. This payment should acknowledge the dedication and commitment that all staff have shown by supporting our Mums and Dads through this crisis.
We know many workers gave up planned leave, increased their shifts or changed their working arrangements to provide the extra time and effort needed to help keep residents healthy and engaged during the pandemic – including staff not involved in direct care.
The Government’s failure to recognise this will come back to hurt our leaders in the long-run.
