The Ministry of Health has written to district health boards telling them not to pay their mental health workers the same as aged-care and disability support staff.
The letter is a blow to those left out of the recent $2 billion pay equity settlement boosting the wages of 55,000 aged-care and disability workers.
The document, leaked to Checkpoint with John Campbell, tells DHB chief executives any top-up payments to mental health support providers would risk breaching the Public Finance Act.
It seeks confirmation that DHBs "do not intend to provide such funding, or will cease if any initial payment has been made".
Neither Minister of Health Jonathan Coleman nor the Public Service Association were aware of the letter.
The pay equity settlement - announced by Prime Minister Bill English in April - increased wages for workers providing aged and residential care, but not for workers in mental health support.
Since then, the mental health sector has been reporting a loss of existing workers and difficulty attracting new ones.
One DHB told Checkpoint that the sector faced catastrophe if workers could not be retained.
Public Service Association (PSA) assistant national secretary Kerry Davies called the ministry's letter "outrageous".
"I'm totally shocked at that. I just cannot understand why the MOH [Ministry of Health] would do that," she said.
"Why they would put a limit on what DHBs can fund and also what NGOs can actually pay mental health support workers."
"I'm totally shocked at that" - PSA's Kerry Davies
Platform Trust chief executive Marion Blake said mental health support workers currently earned $16-19 an hour, while those working in aged and residential care now received $19-23.50 an hour - or about 20 percent more.
The pay gap was beginning to have a serious impact, Ms Blake said.
"They're losing staff at a time when we need mental health and addiction [support providers] to be as strong as they possibly can," she said.
"Not only are people leaving the mental health services or have indicated that they will be leaving, it's also becoming increasingly difficult to recruit people, because people can be paid a higher wage - sometimes as much as $6 an hour difference - by going to work in the disability services."
The Ministry of Health declined to be interviewed. In a statement, it said:
"While the Ministry has appreciated well intentioned and equitable consideration by some DHBs, it was necessary to make it clear that all funding paid to DHBs through the Ministry had been specifically appropriated by Parliament for a purpose.
"It was clear that no pay equity funds could be used for mental health workers nor could general funds be used for the purpose of a top-up to contracted providers for their mental health workers.
"Additionally, since the legislation came into force, a claim has been lodged by E Tū and the PSA seeking pay parity for mental health workers," the statement said.