Information for Individualised Funding

How the care and support workers pay equity settlement affects people using Individualised Funding, Enhanced Individualised Funding and Enabling Good Lives Hosted Personal Budgets.

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The Care and Support Workers (Pay Equity) Settlement Act 2017

All eligible care and support workers employed by people using Individualised Funding, Enhanced Individualised Funding and Enabling Good Lives (IF/EIF/EGL) Hosted Personal Budgets are covered by the Care and Support Worker (Pay Equity) Settlement Act 2017 (the Act).

Under the Act, hosted personal budget holders (employers) are obligated to:

  1. pay their eligible care and support workers the new minimum pay rates. (In most cases, this is an increase in pay rates.); and
  2. ensure that care and support workers are able to attain qualifications.

What it means for budget holders

Your allocated budget has increased so you can comply with the requirements of the legislation. The increase has been calculated to ensure that eligible workers are paid the correct new rates.

Any employee of a budget holder who provides care and support must be paid at one of these minimum rates.  There is no opting out of paying minimum rates to your employees.

Employers can choose to pay their employees above the new rates – you cannot choose to pay below the new rate.

Applying the correct rate

Existing employees (as at 1 July 2017)

The new pay equity rates came into effect from 1 July 2017.

If you haven’t talked to your employees to work out what the correct rate will be according to their qualifications and/or experience, you can contact your host provider for help.

To assist you work out correct rates, download the following spreadsheet:

If you purchase payroll services from your host, they will rely on your instruction to make changes to pay rates. Paying an employee at the correct rate will depend on the length of time they have worked for you and their qualifications as at 30 June 2017. Please see the table below for the rates that apply. The rates apply to any support services delivered from 1 July 2017.  The new pay rate must be that which is more favourable to the employee.

Length of service Qualifications* Pay band Min pay rate from 1 July 2017
Support Services Rate
<3 years OR None L0 $19.00
3-8 years OR Level 2 L2 $20.00
8-12 years OR Level 3 L3 $21.00
12+ years OR Level 4 L4b $23.50

* Qualifications are included on the Careerforce website

Employee rate example

If someone has been employed by an IF budget holder for 1 year and has a level 4 qualification, then they must be paid pay band L4b, $23.50 per hour. If someone has been employed by an IF budget holder for 7 years but has no qualifications, then they must be paid under pay band L2, $20.00 per hour.

New employees from 1 July

All new eligible care and support workers from 1 July progress through the pay bands on the basis of obtaining qualifications only (e.g. no length of service is applicable).

Ensuring that care and support workers are able to attain qualifications

An employer must take all reasonably practicable steps to ensure that a care and support worker is able to attain qualifications. If you need support around training support workers, please talk to your host provider.

Budget changes explained

Your overall budget allocation has increased. The increase has been allocated for the purposes of increasing support worker wage rates to meet the requirements of the settlement.

The contracted rate for IF HCSS (personal care and household management) has increased to $30.43. Budget amounts for Carer Support and MSD allocations are not covered by the settlement and remain unchanged.

The Ministry automatically recalculated allocations for IF Respite, EIF and EGL Hosted Personal Budgets and sent revised budgets for each person to host providers during July. The revised budgets do not include IF HCSS as this change has been adjusted via a contract variation.

View the full Information on the settlement, obligations for employers and information for employees:

Important host provider service changes

The Ministry has changed how host providers are paid for mandatory host services.

What you don’t have to pay for from your budget allocation

Budget holders no longer have to pay mandatory host fees (fees determined by the Ministry) from their budgets. The Ministry now pays hosts directly for mandatory host services which include set-up, ongoing coaching and claiming funding from the Ministry.

What you pay for from your budget allocation

Additional services you purchase from your host provider such as payroll still need to be funded from your budget. Please speak to your host provider if you need clarification regarding the mandatory services they are contracted to provide.

Employment agreement changes

In most cases you do not need to change your agreements, however it would be prudent to write a letter to your employees outlining the change in their wage rate in accordance with the new settlement rates. This will reassure them that the new legislation has been implemented. Please seek advice from your host provider if you are unsure.

Leave accruals

The Ministry is awaiting further advice on this and should be in a position to provide further information once this is known.

Definition of an employee

An employee means a person who is an employee as defined in Section 6(1)(a) or (b)(i) of the Employment Relations Act 2000. It does not include people who are contracted rather than employed to deliver services.

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