Indirect employment in aged care – Issues paper

One of the many challenges facing the aged care sector is attracting and retaining workers that can meet aged care needs now and into the future.

While there are several facets to this challenge and a number of reforms underway (see below), the Productivity Commission has been tasked by the Treasurer to examine a relatively narrow facet, namely: … employment models in aged care, and the effects that policies and procedures to preference the direct employment of aged care workers would have on the sector.

The study stems from a recommendation of the Royal Commission into Aged Care Quality and Safety (the Royal Commission) that aged care providers be required to preference direct employment of workers engaged to provide personal care and nursing services.

The recommendation appears intended to address a reported increase in the use of independent contractors and workers sourced through digital platforms in aged care. The Royal Commission’s final report highlighted concerns that their use could erode the quality of care, accountability for the care provided, and pay and conditions for the workforce. However, there is little evidence on the prevalence and impacts of these employment arrangements in aged care.

This study will look at the use of indirect employment in aged care — with a focus on independent contractors (including those in labour hire agencies) and workers engaged through digital platforms in residential and home-based aged care, and the implications for consumers, the aged care workforce and aged care providers. While aged care workers provide a wide range of services to older people (including allied health services, cleaning, meals, transport and social services) this study focuses on personal care workers and nurses.

The study is taking place at a time when aged care workforce issues are prominent and a range of reforms to Australia’s aged care system are planned or underway. While these provide important context, it is beyond the study’s scope to examine the full range of issues relating to the aged care workforce — many of which have previously been examined by other reviews (for example Aged Care Workforce Strategy Taskforce 2018; CEDA 2021; PC 2011; Royal Commission into Aged Care Quality and Safety 2021a; Senate Community Affairs References Committee 2017).