Rest homes fighting Government for financial help to stay afloat

An Auckland rest home is fighting the Government for funding to help keep its doors open - a consequence of a recent landmark pay equity settlement.

The settlement was implemented on July 1, giving a pay boost to New Zealand's 55,000 care and support workers.

But the settlement - created to recognise the work carried out by workers in the aged and disability residential care sector - is causing huge financial strain to their employers.

On the advice of the Ministry of Health, the owner of one rest home in south Auckland has sent three invoices to Counties Manukau District Health Board - and is about to send a fourth.

Owner of Glenbrook Rest Home Peter Mathyssen says he's asking for funding to cover the shortfall he says the settlement has created.

"We're underpaid because we're short of residents and the funding for the pay equity is tied to the occupation rate."

But he says the invoices have been thrown right back at him, and the DHB says it's not paying.

"I've told them to stop their incessant game playing with the providers," Mr Mathyssen says.

"The Ministry of Health says go to the DHB, but the DHB - which is part of the ministry - says go back to the Ministry of Health."

The Ministry of Health director of service commissioning Jill Lane says all providers were given "advance interim payments" but that employers who were struggling could be considered for "transitional assistance".

"The ministry is supporting DHBs by looking at how the settlement is impacting care and support workers, the employers they work for and the New Zealanders to whom they dedicate their time."

Help could be on its way for rest homes like Glenbrook. Simon Wallace from the Aged Care Association says the group is working with the Government and the Ministry of Health on a financial support package.

Around 100 of the association's members around the country have been affected, and three have already been forced to close their doors in the two months since the settlement came into effect.

"I'm certainly aware of some members that have already made their staff redundant or are looking at that possibility," Mr Wallace says.

"And that's certainly not the outcome that any of us would have wanted from the pay equity settlement."

The urgency for a better financial assistance system to be implemented differs across providers.

If nothing changes, Mr Wallace says we could well see many more facilities shutting their doors in months and years to come, with their elderly residents being forced to find new homes.

"And that's not in anyone's interests."