The tariff uplift is based on the estimated increase in the cost of services within the hospital and community health service (HCHS) sector. The 2.5 per cent. increase in pay settlement and drift translates into a 1.7 per cent. increase in HCHS costs because pay represents around two-thirds of total HCHS costs.
Pay settlement is the level of pay increase awarded following the recommendation by pay review bodies. Pay drift is the increase in paybill beyond increases due to workforce growth, pay settlement and staff on-costs. For example, a decrease in workforce growth or improved staff retention may lead to pay drift due to a change in the distribution of staff between different incremental points on the pay scale.