Will immigration rules hit or miss rest homes?

The Aged Care Association has warned that the tougher immigration rules announced earlier this week could have a big impact on rest home employment, but the bump in pay rates could eventually put some of those workers over the threshold so may be exempt.

RNZ: Resthomes would be hit by new visa rules

The government has proposed that foreign workers earning less than $49,000 only be allowed to stay in New Zealand for three years, before going through a 12-month stand-down period. They would then need to reapply.

Aged Care Association chief executive Simon Wallace said migrants make up 30 percent of the sector’s 20,000 workers.

But with an ageing population, the number of workers needed was expected to grow by 10,000 in the next decade, and migrants would be relied on to fill those roles.

“The 600 resthomes across the country do their best to employ New Zealanders, as caregivers or nurses, but there just isn’t that pool of New Zealanders available, so we employ migrants,” he said.

“These changes that the government’s announced will have a significant impact on our ability to recruit labour into our sector at a time when we’ve got an ageing demographic, and we’re going to need more caregivers to look after those older people who are increasing in number.”

He said it was disappointing the government proposed the changes a day after it agreed to pay women caregivers more money.

“[The changes] don’t reflect the value of our migrants and what they do for the sector.”

The increase in rest home worker pay rates will put some over the threshold $49,000 threshold, but many may remain below it.

From the Government announcement:

“For the 20,000 workers currently on the minimum wage of $15.75 per hour, it means on July 1 they will move to at least $19 per hour, a 21 per cent pay rise.”

A care and support worker on the minimum wage with three years’ experience and no qualifications will receive a 27 per cent increase in their hourly wage rate moving from $15.75 to $20 per hour from July 1. That rate would progressively increase to $23 by July 2021 and would rise further if they attain a higher qualification.

“For these 55,000 workers this funding boost will see wages increase to between $19 to $27 per hour over five years.”

Annual incomes at those rates if working 40 hours per week:

  • 15.75 x 40 = 32,760
  • 19.00 x 40 = 39520
  • 23.00 x 40 = 47,280
  • 27.00 x 40 = 56,160

A pay rate of 23.60 per hour ($49,088 annual income) would be necessary to reach the threshold.

This may impact on many lower skilled immigrant rest home workers, especially in the short term.

But will substantially increased pay rates attract more of the New Zealand work force to work in health care? Possibly, and it may also encourage part time workers to increase their hours.

One reason suggested for unemployed people not being attracted to some types of work is the low pay rates.

Paying rest home workers a decent wage may boost families out of poverty, lower the unemployment rate, and reduce immigration pressures as well.

Decent pay rates may make rest home care work more of a viable career rather than being a last resort job to eke out a subsistence income.

One possible unintended pressure – higher rest home wage rates may attract ex-Kiwis back to New Zealand. This will keep net immigration numbers up and there’s nothing the Government can do to stop citizens coming home.