The Aged Care Association wants the Government to lower the threshold at which rest-home residents are eligible for subsidies, freeing the money to boost low wages in the sector.
The Human Rights Commission has issued a report into the industry recommending the Government increase funding to help improve chronically low pay.
The average hourly wage for rest-home workers is about $14.50, and there is a gap of $3 to $4 per hour between them and those providing the same care in public hospitals.
The Aged Care Association wants pay parity, but says it is unlikely the Government will provide the approximately $140 million needed annually to achieve it.
Chief executive Martin Taylor says the Government could find more money by, for example, lowering the amount of assets rest home residents can have from the current $210,000 and still get state funding.