Government to pay up to $650m to fix long-running holiday pay deficit for DHB workers

A decade's worth of underpayments to nurses, doctors and other health workers will be rectified as the Government moves to pay back staff at district health boards across the nation to comply with the Holidays Act.

A file image of a doctor in a hospital reading a chart. Source: Pexels

Initial indications show $550-650 million is owed to staff but it will take up to two years for DHBs to review and rectify the issue, Health Minister Dr David Clark said today in a statement.

“Over 100,000 highly skilled and dedicated health workers, both current and former staff, have been short-changed over many years. But this Government is putting things right,” Mr Clark said.

“I can assure our health staff that resolving these historic pay issues is a priority for DHBs working alongside unions. Our doctors, nurses, allied health workers and other staff deserve no less.

“DHBs have included the estimated cost of Holidays Act liabilities in their end of year financial reporting, although a few DHBs are still to make comprehensive cost estimations.

"A substantial extra one-off cost is therefore included in the end of year results, taking the sector-wide deficit for 2018/19 to $1.081 billion.

“More than half of that, $666 million, is due to one-off costs - $590 million for Holidays Act compliance; $32 million as a result of the Resident Doctor strikes and $44 million for the previous National Oracle Solution project," Mr Clark said. 

He said four DHBs - Canterbury, Waikato, Counties Manukau and Southern - account for most of the underlying deficit. Accounting for $268 million in total, that’s 65 per cent.

“I have strengthened financial management at the DHBs with the largest deficits. There is now a commissioner at Waikato DHB, a Crown monitor at Canterbury DHB and I intend to appoint a Crown monitor to Southern DHB. A Crown monitor continues to support Waikato and Counties Manukau DHBs,” Mr Clark said.