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Aged Care Employment

Study report

This report was released on 21 October 2022. It looks at whether there should be a policy to preference the direct employment of aged care workers.

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  • Key points
  • Media release
  • Contents
  • It is widely recognised that there are major problems in the quality of aged care, especially in residential aged care. There are many reasons for this, but there is little persuasive evidence that a policy to preference direct employment would improve outcomes. It could indeed worsen outcomes.
  • Direct employment is already by far the most common mode of employment in the aged care sector.
    • Agency workers and independent contractors account for less than 4 per cent of the care workforce (personal care workers, nurses and allied health workers).
    • The scope for any gains from a policy to preference direct employment therefore needs to be kept in perspective.
  • In the context of the chronic staff shortages facing the sector, a policy to restrict agency work is not a realistic option.
    • Where agency workers are used by approved providers of residential and home care, it is typically as a last resort for filling short-term staffing gaps or vacancies that cannot be filled otherwise, particularly in remote areas where workforce pressures are most acute.
    • Independent contractors in residential care are used mainly for accessing specialist skills.
  • The use of independent contractors in home care — often through digital care platforms that connect workers directly with consumers — is growing from a very small base as more older Australians express a preference to self-manage their government-funded care package.
    • This attests to the benefits derived by individual consumers (and their families) and individual workers who are choosing this form of work over more traditional employment.
  • Many older Australians highly value the choice and agency that this model provides, as well as the bespoke nature of the service offerings from platforms that cater for diverse needs.
    • In many cases this is allowing them to fulfil an aspiration to stay in their own home for as long as possible.
  • Equally, many platform workers highly value the flexibility, autonomy and the potential for higher pay associated with independent contracting — all of which add to their job satisfaction and help keep them in the sector.
  • Given these benefits, there is a role for platforms as part of the solution for the future of work in aged care.
    • This model works particularly well for the delivery of lower-risk care services to older Australians who have the requisite abilities and support to exercise choice and control over their care.
  • Instead of focusing on employment models per se, the Government should expedite the suite of reforms to increase safety and quality that are currently planned or underway.
    • These are likely to be more effective at managing the risks inherent in the delivery of aged care services, irrespective of employment models.
  • Issues that go beyond aged care, such as the protection of workers in the gig economy, are best addressed through an economy-wide lens.

Media requests

Leonora Nicol, Media Director – 0417 665 443 / 02 6240 3239 / media@pc.gov.au

Regulating for direct employment not the answer for aged care

A new report by the Productivity Commission has found the use of independent contractors in aged care gives older Australians more choice and is helping them stay in their own homes longer.

“There are a variety of employment models being used in aged-care and they all have a place. Some are new such as older Australians managing their home care by hiring care workers through online platforms,” Commissioner Martin Stokie said.

Currently, the overwhelming majority of workers in aged care are directly employed. In fact, independent contractors and agency workers only make up less than 4 per cent of the personal care workers, nurses and allied health workers in the aged care sector.

“Independent contractors and agency workers are critical for filling temporary gaps or finding specialists in aged care. Regulations telling providers they can’t use these types of workers would make the current workforce shortages even worse,” Commissioner Catherine de Fontenay said.

Independent contractors have high levels of job satisfaction and on average higher pay, which helps keep them in the sector.

“There is a role for platforms that connect independent contractors directly with home care consumers, particularly in the delivery of lower-risk care services for older Australians who want and are able to exercise choice and control,” Commissioner Stokie explained.

“Many older Australians value the flexibility this model provides them in terms of making decisions about their home care.”

The review of employment models was prompted by a recommendation from the Royal Commission into Aged Care Quality and Safety.

“We were asked to look at whether direct employment should be preferenced in the delivery of aged-care but we believe instead of focusing on employment models specifically, the way forward is to expedite the broader aged care reform agenda. This would include those reforms that will allow for better home care options, better oversight of home care services and workers, and better protections and support for all workers in aged care, including independent contractors,” Commissioner de Fontenay said.

Media requests

Leonora Nicol, Media Director – 0417 665 443 / 02 6240 3239 / media@pc.gov.au

  • Preliminaries: Cover, Copyright and publication detail, Foreword, Terms of reference, and Contents
  • Overview - including key points
  • Findings and recommendations
  • 1. About this study
    • 1.1 Background to the study
    • 1.2 What has the Commission been asked to do?
    • 1.3 The Commission's approach
  • 2. Setting the scene
    • 2.1 A snapshot of the aged care sector
    • 2.2 Indirect employment in aged care
    • 2.3 The emergence of platforms
  • 3. Consumer perspectives
    • 3.1 The link between care quality and employment
    • 3.2 Indirect employment — advantages for consumers
    • 3.3 Indirect employment — disadvantages for consumers
    • 3.4 Impacts of preferencing direct employment
  • 4. Worker perspectives
    • 4.1 Is independent contracting a choice?
    • 4.2 Indirect employment — advantages for workers
    • 4.3 Indirect employment — disadvantages for workers
    • 4.4 Impacts of preferencing direct employment
  • 5. Business perspectives
    • 5.1 Independent contracting in home care
    • 5.2 Indirect employment — advantages for businesses
    • 5.3 Indirect employment — disadvantages for businesses
    • 5.4 Impacts of preferencing direct employment
  • 6. Way forward
    • 6.1 The risks of preferencing direct employment
    • 6.2 Protecting aged care quality and safety
  • A. Public engagement
  • B. Insights from the NDIS
    • B.1 Profile of the disability care and support workforce
    • B.2 Differences between the NDIS and aged care models
    • B.3 Differences in NDIS and aged care regulations
    • B.4 Summary and insights for the aged care sector
  • C. Data sources
    • C.1 The National Aged Care Workforce Census
    • C.2 StewartBrown data
    • C.3 ABS Characteristics of Employment Survey
    • C.4 Comparison of estimates of indirectly employed aged care workers
    • C.5 Estimate of aged care consumers
  • Abbreviations
  • Glossary
  • References

Printed copies

Printed copies of this report can be purchased from Canprint Communications.

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