The Aged Care Association says the sector is in crisis, with a huge shortage of nurses and a growing aged population which is expected to more than double in the next two decades.
The association says registered nurses are leaving for better paid jobs with district health boards and it wants the Government to plug the pay gap now.
"We are in a really dire situation. We've got nurses doing double shifts, we've got retired nurses being pulled back into the workforce," Aged Care Association chief executive Simon Wallace said.
The association says in 20 years there will be a quarter of a million elderly Kiwis over 85. That's up from around 85,000 now and rest homes might have to close their doors if staffing issues aren't addressed.
"This is a Government that talks about empathy and compassion. We want them to stand up and show that empathy and compassion for our older people,” Mr Wallace said.
Nurses and aged care workers are paid differently due to different funding models - which the association says is outdated.
Now that nurses have received a pay rise, the aged care sector says it's losing it’s nurses to better paying DHB jobs.
Radius Care chief operations officer Jane Smart explained the issue.
"Why would somebody who has got the same qualifications, exactly the same experience, come to look after someone who is frail and elderly in an aged care facility, when they can go into the hospitals and get paid a lot more?"
Radius Taupaki Gables facility manager and registered nurse Laurel Winwood said she has lost all but one registered nurse to a DHB and has had to replace almost an entire team, "and that has been hugely difficult".
There are also calls for a Government-led recruitment drive for overseas aged care nurses.
"The Government has just stepped in to bring in 900 teachers from overseas to fill teaching shortages, but we're not seeing any urgency from the Government at all to allow us to recruit overseas nurses," Mr Wallace said.
The association says it's in talks with DHBs and the Ministry of Health, but the process is lengthy and says it wants to see action now.
The Government says the issue is being looked into.
Health Minister David Clarke said he's "having an on-going conversation" with Immigration Minster Iain Lees-Galloway.
"And I'm aware he is doing some policy work to look at the settings the previous government put in place. And he's working with the industry to find the best way through the situation."
Mr Lees-Galloway says that policy is reaching its final stages.