Pro-rating funding for PSW wages creates unintended consequences

Photo of PSW with client. Caption: More than nine months after expressing Ontario's intention to retain PSWs,  implementation continues to hit major bumps in the road.

More than nine months after expressing Ontario’s intention to retain PSWs, implementation continues to hit major bumps in the road.(CanStock Photo)

In 2010 a provincial coalition of experts was assembled to look an integrated hospice palliative care system in Ontario.

Hospices are a specialized residential facility for palliative care patients. As the coalition’s report states, “hospice palliative care is a philosophy of care that aims to relieve suffering and improve the quality of living and dying.”

To do that the government relies on these hospices to produce a substantial portion of own-source revenue, most of that coming through fundraising.

Among the many recommendations in the four-year-old coalition report is one to increase the percentage of public funding for Ontario’s hospices to 80 per cent of their operating expenses. Presently it is about 50 per cent.

It may be wise to keep that in mind as the hospices now grapple with unexpected costs associated with the government’s initiative to improve PSW wages and address the sector’s ongoing recruitment and retention issues.

Some Ontario hospices are telling us they are reeling after discovering they are responsible for paying a share of the personal support worker (PSW) wage increase retroactive to April 1. If the wage increase is not fully funded by the Ministry of Health and Long Term Care (MOHLTC), it means that hospices have to find that money from increased charitable giving.

When the 16% is added for increased CPP contributions, vacation and other linked payroll costs, it means the overall transfer to fully funded agencies is about $1.74 per hour. With the government pro-rating the rate increase based on existing funding ratios, it is anticipated that the amount transferred to the hospices will be closer to 80 cents per hour, not $1.74.

The Dr. Bob Kemp Hospice in Hamilton employs PSWs represented by OPSEU. At present those PSWs start at $16/hour — about $2 more than the new PSW minimum wage. When the government initially spoke about increasing that minimum wage, the not-for-profit hospice likely felt secure knowing they had a margin to play with before it would impact their budget. What they didn’t see coming was the across-the-board $1.50/hour increase that would immediately impact their bottom line.

To make ends meet, the hospice has to fundraise $100,000 a month – something they have done remarkably well. Fundraising on that scale requires significant planning, including large-scale annual gala events.

The hospice now finds that it has a bill of almost $10,000 in retroactive pay and increased monthly costs of about $1800 to meet the requirements of the PSW increase. They are unsure how much of that will be covered by public funding, but estimate their share to be at least 31 per cent – an expenditure they hadn’t counted upon. Had they known this was likely to happen in January – when the government first announced it was planning a wage adjustment for PSWs – they may have been able to make in-year adjustments. Half way through the fiscal year, they are now grappling with what the decision will mean for their budget.

If there is a silver lining in all this it is the fact that the government is still making adjustments to the roll-out of the PSW plan. Dr. Eric Hoskins, Ontario’s Health Minister, should revisit the recommendations of the coalition panel. Making a down-payment towards picking up a greater share of hospice funding could involve absorbing the full cost of the PSW funding increase. That would end the present panic over the need for increased charitable giving in tough times, and it would set the hospices on the path towards greater long-term sustainability.

For employers that are co-funded by different Ministries, the picture is a little different.

Despite announcing the plan with Finance Minister Charles Sousa earlier in the year, the PSW wage increase appears to be largely initiated by the MOHLTC. Some of the target agencies that provide home and community care receive funding from both the MOHLTC and the Ministry of Community and Social Services (COMSOC). If the funding split is 60/40, for example, that means some fully funded public agencies will only be receiving 60 per cent of the cost of the wage increase, or about $1.04 per hour.

Yet some agencies are already balking at this, suggesting that if the MOHLTC’s share is 90 cents, that’s how much they will pass on. Participation Lodge Grey-Bruce – which provides both residential and community based programs for adults with disabilities – has chosen to pass on the full increase to PSWs whose work is fully compensated by the MOHLTC, and 90 cents per hour for those whose work receives mixed funding from COMSOC.

To us this appears to be a case of the right hand not knowing what the left hand is doing.

If the Finance Minister was part of this decision-making process, how could he not recognize that this would create either wage discrepancies or a shortfall for agencies that also receiving money from COMSOC?

We’ve previously acknowledged the government’s good intentions in expediting the wage increase for PSWs. Clearly to make this effective, Dr. Eric Hoskins needs to work with his counterparts to ensure this takes place without damaging the services that the recruitment and retention strategy was intended to stabilize. If workers are receiving less than the promised wage boost, clearly the initiative is on shaky ground and success at risk.

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