Home Support Workers Struggle with Rising Petrol Costs & Low Pay | RNZ News

Rising fuel costs are squeezing the margins of New Zealand’s home care sector, with workers increasingly forced to absorb expenses that outpace government subsidies. The situation is particularly acute for those providing care in rural areas, where travel distances are significant and the financial burden is highest.

Laura, a Nelson-based home support worker, described a growing struggle to cover petrol costs while earning a wage that, despite being in the second-highest pay band for her role, still falls short of the current living wage of $28.95 an hour. Her experience, detailed in reporting by RNZ, highlights a systemic issue where fuel subsidies haven’t kept pace with price increases since 2022. The current subsidy provides $2.35 for travel between clients based on a 3.7-kilometer average distance, equating to 63.5 cents per kilometer. This is significantly lower than the Inland Revenue’s mileage rate for petrol cars, which stands at $1.17 per kilometer. For trips exceeding 15km, the rate drops to 64c per kilometer.

The Cost of Caring: A Growing Disparity

Laura’s situation isn’t unique. She drives a 2003 Mitsubishi Lancer with 258,000 kilometers, and struggles to afford necessary repairs or a replacement vehicle. To mitigate expenses, she’s resorted to using a second-hand moped whenever possible, hoping for dry weather. The financial strain is so severe that she actively avoids checking her petrol spending. The RNZ report notes that some rural areas are becoming increasingly difficult to service, as the cost of travel can effectively negate earnings. Workers face distances of 11km between one client and the next, followed by another 14km to reach a third, turning workdays into a financial loss.

The Public Service Association (PSA) national secretary, Fleur Fitzsimons, has called for “direct intervention” to support home support workers. She emphasized that these workers are among the lowest paid and are disproportionately affected by the fuel crisis, compounded by a cancelled pay equity claim. Fitzsimons argues the government needs to demonstrate leadership and provide adequate support to prevent workers from falling into poverty.

Funding Structures and Provider Responsibility

Health New Zealand acknowledges the cost pressures faced by providers and their workforce, including fuel costs. However, Deborah Woodley, acting director for funding, community and mental health, clarified that care workers are employed by third-party providers, and funding for 2026/27 is currently under review. This suggests any potential adjustments to funding levels, and therefore subsidies, won’t be immediate. The current system places the onus on these third-party providers to manage costs, potentially leading to downward pressure on worker wages or reduced service availability.

Impact Beyond Individual Workers

The financial strain on home care workers has broader implications for the sector and the individuals who rely on these services. Reduced worker availability, particularly in rural areas, could limit access to essential care for vulnerable populations. The situation also raises questions about the sustainability of the current funding model and the long-term viability of the home care sector. The reliance on workers using their personal vehicles, and absorbing a significant portion of travel costs, effectively subsidizes a publicly funded service with private expense. This is a common dynamic in the ‘gig economy’ and care work, where the true cost of service delivery is often obscured.

Mileage Rates: A Comparative View

The discrepancy between the government subsidy rate (63.5c/km or 64c/km) and the Inland Revenue mileage rate ($1.17/km) is a key point of contention. The IRD rate is designed to cover all vehicle operating costs – fuel, maintenance, depreciation, insurance, and registration – while the subsidy focuses solely on fuel. This difference means workers are effectively covering a substantial portion of vehicle expenses out of their own pockets. According to the Automobile Association (AA), petrol prices in New Zealand have been volatile in recent months, with fluctuations influenced by global oil markets and exchange rate movements. AA’s fuel price data provides a historical overview of these trends.

The Broader Context of Care Worker Compensation

The challenges faced by home care workers are part of a wider debate about compensation and working conditions in the care sector. A 2023 report by the New Zealand Council of Trade Unions (NZCTU) highlighted the low wages and precarious employment conditions prevalent in the industry. The NZCTU report called for improved pay, secure employment contracts, and better access to training and professional development. The current situation with fuel costs exacerbates these existing issues, further eroding the financial security of care workers.

What’s Next: Funding Review and Potential Adjustments

Health New Zealand’s review of funding for third-party providers in the 2026/27 period represents the immediate next step. The outcome of this review will determine whether adjustments are made to the funding model to address the rising cost of fuel and other expenses. However, the timeline for any changes remains uncertain. The PSA is likely to continue advocating for direct intervention and a more equitable distribution of costs. The situation will also be closely watched by other sectors that rely on workers who incur significant travel expenses, such as visiting nurses and mobile tradespeople. The outcome of this funding review could set a precedent for addressing similar challenges in other industries.