The Fair Work Commission (FWC) has introduced a new classification framework and changes to minimum rates of pay under the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award), which will be implemented in stages from 1 October 2026.
The reforms represent one of the most significant changes to the SCHADS Award in recent years and are intended to address the historical undervaluation of work performed across the care and community services sector.
For employers, the changes are expected to increase labour costs for many SCHADS-covered employees and will require employers to review their current classification, remuneration and workforce planning arrangements to ensure compliance and manage associated costs.
Who does the SCHADS Award currently cover?
The SCHADS Award covers employers throughout Australia in the:
- crisis assistance and supported housing sector;
- social and community services sector;
- home care sector;
- family day care scheme sector,
and their employees in the classifications listed in Schedules B to F of the SCHADS Award.
The classifications in the SCHADS Award are very broad and cover the following roles:
- Administrative/operational support workers
- Caseworkers
- Crisis assistance and supported housing workers
- Disability support workers
- Home care employees performing home care aged work or home care disability work
- Social and community services workers
What are the changes?
As part of its Gender-based undervaluation – priority awards review, the FWC has made changes to the SCHADS Award which include:
- changes to minimum pay rates
- a new classification structure
- new definitions in the SCHADS Award
- changes to rules about progression between pay points
We summarise a number of these changes below.
Pay increase for disability home care employees
Employees currently classified under Schedule E, Home Care Employees – Disability Care, will receive an interim increase to their minimum rates of pay from the first full pay period commencing on or after 1 December 2026.
The increase will be 15% for most Schedule E classifications. However, employees classified at Levels E.4.2 and E.5.2 will receive increases of 14.96% and 13.31% respectively.
Any residual increase required to align affected employees with the new classification structure will apply from the first full pay period commencing on or after 1 October 2027. The rates applying at that time will be updated to incorporate the outcome of the 2027 Annual Wage Review.
A New Integrated Classification Framework
From 1 October 2027, the existing classification structures in Schedules B, C, E and F will be replaced by a single integrated classification structure comprising Levels 1 to 10, with multiple pay points applying within some levels. The new structure is known as the Final Classification Structure (FCS).
The FCS will have new classification levels ranging from Level 1.1 to Level 10.3 and is designed to provide clearer, more consistent career progression pathways across the sector. Under the new framework, classifications will more closely align with qualifications, industry experience, technical skills and workplace responsibilities. Some of the new classifications will involve a modest pay increase for employees.
Progression will generally be based on specified periods of continuous service or relevant industry experience. However, an employee will not progress where they have not demonstrated competency and satisfactory performance against documented standards in a performance assessment conducted within the relevant period. Employers may also request reasonable evidence of relevant industry experience obtained with another employer.
Translation arrangements will apply to existing employees. An employee’s minimum rate will be the higher of the minimum rate for their translated classification and the minimum SCHADS Award rate that applied to them as at 30 September 2027, including the Equal Remuneration Order where applicable.
Employers should therefore determine and communicate which classification existing employees will transition to from 1 October 2027 and plan for any necessary pay adjustments.
Revocation of the Equal Remuneration Order
The Equal Remuneration Order which has historically applied to the sector will be revoked when the new classification and wage structure commences on 1 October 2027. The FWC concluded that the minimum rates under the new structure address the identified gender-based undervaluation and provide equal remuneration for work of equal or comparable value, rendering the Equal Remuneration Order redundant.
The order formally revoking the Equal Remuneration Order is expected to be published closer to the operative date.
Other recent changes
This significant overhaul of the SCHADS Award follows other recent changes including:
- Temporary increases to vehicle allowances (effective 1 September 2026): Vehicle allowances increased temporarily to $1.05 per kilometre through February 28, 2027.
- General wage increase (effective 1 July 2026): All minimum pay rates under the SCHADS Award increased by 4.75% following the FWC’s Annual Wage Review.
- Sleepover rules (effective 1 June 2026): Shifts with a sleepover now treat the work before and after the sleepover as part of a single continuous shift rather than a break. Employers and employees can agree to extend ordinary shift hours up to 12 hours (with a maximum of 8 ordinary hours in either work period surrounding the 8-hour sleepover).
HR Legal can assist employers with navigating these complex changes to the SCHADS Award – contact us today. In light of the broad ranging changes, we recommend employers start planning and seek advice as soon as possible.
- The FWC’s final decision dated 11 September 2026 can be accessed here: Decision [2026] FWCFB 232
- The FWC’s SCHADS Award final determination as to Schedule E dated 11 September 2026 can be accessed here: Determination PR814259
