FWC hands down landmark decision that overhauls SCHADS Award

The Fair Work Commission (FWC) has handed down a landmark decision that will significantly reshape pay and classification structures across Australia’s social, community, home care and disability services sectors. 

In its 1 June 2026 decision, the Full Bench finalised major reforms to the Social, Community, Home Care and Disability Services Industry Award (SCHADS Award), concluding a review that found longstanding gender-based undervaluation of work performed in the sector.

The decision will introduce a new integrated classification structure, increase minimum wage rates for many workers, and aims to simplify a system that the Commission found had become overly complex and prone to classification disputes.

Background to the Review

The review began in June 2024 when the Commission examined classifications in five modern awards to determine whether work had been undervalued because it was performed predominantly by women. In an earlier decision issued in April 2025, the Commission found that classifications covering social and community services workers, crisis accommodation employees and disability home care workers under the SCHADS Award had been affected by gender-based undervaluation.

The Commission concluded that existing wage rates did not properly reflect the value of the work performed and that the award’s classification system was no longer fit for purpose. It found that multiple classification streams, inherited from different pre-modern awards, created inconsistency, complexity and confusion about how employees should be classified and paid. The Commission also identified widespread concerns about employee misclassification arising from unclear descriptors and overlapping responsibilities.

A New Integrated Classification Structure

At the centre of the decision is the creation of a single integrated classification framework that will replace the current structures in Schedules B, C, E and F of the SCHADS Award.

Rather than maintaining separate classification streams, the new system establishes one framework covering three broad sectors:
•    Social and community services (including disability services);
•    Crisis assistance and supported housing; and
•    Home care services.

Within those sectors, workers will be grouped into defined work streams such as disability support work, social and community services work, crisis assistance work, home care work and administrative or operational support roles. The Commission said the objective was to create a structure that is easier to understand, values comparable work more consistently and reduces disputes about classification.

A notable feature of the new structure is its stronger focus on qualifications and equivalent experience. The Commission recognised that many workers in the sector acquire skills through practical experience or “lived experience” rather than formal study. The framework therefore allows equivalent skills, knowledge and experience to be recognised alongside formal qualifications when determining classification levels.

New Pay Rates

The decision establishes a new wage schedule spanning Levels 1 to 10.

Under the proposed structure, entry-level administrative support workers begin at Level 1, while disability support workers, home care workers and social and community services employees are classified at higher levels depending on experience, responsibilities and qualifications.

The benchmark rate for Certificate III-level work is set at approximately $1,314 per week, reflecting the Commission’s earlier findings about the value of caring work. Degree-qualified positions begin at approximately $1,579 per week, with rates increasing through higher professional and specialist classifications. Senior specialist and management roles can exceed $2,500 per week under the new scale.

The Commission also decided that existing employees should not be disadvantaged by the transition. It emphasised that workers should retain existing wage rates when moving into the new structure.

Balancing Equity and Cost

Throughout the decision, the Commission sought to balance the objective of correcting gender-based undervaluation against concerns about affordability and funding pressures.

Employer organisations warned that substantial wage increases would impose significant costs on providers already facing financial pressures. Many submissions highlighted the need for additional government funding and implementation support if the reforms were to succeed.

The Commission acknowledged that the changes would increase labour costs. However, it concluded that the increases were necessary to remedy gender-based undervaluation and achieve the objectives of the Fair Work Act. It also found that replacing the current complex classification arrangements with a simpler structure would improve compliance and reduce disputes, providing significant benefits for the sector.

Implementation Timeline

The reforms will be introduced in stages.

The Commission has published draft determinations to implement the changes and has proposed an interim 15 per cent increase for employees currently covered by Schedule E, which relates to disability home care workers. That increase is intended to take effect from 1 October 2026, subject to final submissions from interested parties.

The broader new classification structure is scheduled to commence on 1 October 2027. At that time, the existing classification schedules will be replaced and a separate Equal Remuneration Order will be revoked to avoid duplication and unintended wage escalation.

Next steps

Businesses covered by the SCHADS Award will need to digest these changes and get a sense of the extent of impact they will have on their organisation. For some businesses, the impact may be modest, with a significant lead time before the changes come into effect. While for other businesses (particularly those with employees paid under Schedule E), the changes are likely to be much more significant and with a much narrower 4-month window before the changes come into effect.

ABLA played a leading role in these proceedings on behalf of a range of employer and industry groups and are well-placed to assist you in navigating these changes.