SCHADS Award changes: New pay rates from 1 October 2026; New classification structure from 1 October 2027

The SCHADS Award is going through a time of unprecedented change. As well as major changes to how sleepovers work which came into effect on 1 June 2026, there are two other significant changes on the horizon:

• A pay increase for Disability Care working in Home Care on 1 October 2026
• A new classification structure for virtually all SCHADS employees from 1 October 2027

Read the Fair Work Commission’s decision from 1 June 2026 regarding these changes here.

Pay increase for Disability Care workers working in Home Care from 1 October 2026

The first major change being made is the 15% pay increase to the minimum wages for employees currently covered by Schedule E of the Award  (i.e. those providing Disability Care in a Home Care setting). 

This increase will not apply to other Disability Support or Home Care workers (i.e. it won’t apply to Disability Support Workers working in a community setting or to Home Care workers working in aged care). 

The increase is being made as the Fair Work Commission has decided that such workers are not being paid sufficiently on gender undervaluation grounds. In other words, they found that due to historical prejudices about the work performed by women being of less value than the work performed by men, the current minimum pay rates for Disability Care in a Home Care (which has historically been performed by more women than men) are currently too low. 

The pay increases are planned to come into effect on the first full pay period on or after 1 October 2026. In the meantime, employees will also receive the benefit of the general minimum wage increase coming into effect on 1 July 2026.

There will then be a moderate pay increase when the new classification structure takes effect on 1 October 2027 for these employees, which will vary according to their classification level.

The FWC’s decision contains a table showing the 1 October 2026 and 1 October 2027 pay increases for these employees as weekly amounts:

The first column of figures is the current weekly pay rate for Home Care Employees performing Disability Care work. The second column of figures are the new weekly figures from 1 October 2026, having been increased by 15%. 

The third column of figures shows the weekly pay rate that will apply when the new Final Classification Structure (FCS) is implemented on 1 October 2027.

The final two columns show the difference between the 1 October 2026 and 1 October 2027 weekly pay rates in dollar amounts and as a %. 

It is important to note that these rates are still in “draft” and are subject to finalisation, however any amendments are likely to be minimal.

Employers with Home Care Employees performing Disability Care work should therefore prepare for the significant increase in wage costs from 1 October 2026.

New classification structure for everyone from 1 October 2027

Employers will have more time to prepare for the next significant change. 

This is a completely new classification structure set to replace the existing classification structure for all employees covered by the Award, apart from those working in Family Day Care (whose classification structure will remain unchanged).

In other words, the new classification structure will apply to the following employees:

• Social and Community Services employees, including those performing Residential Care work
• Home Care employees performing Disability Services work
• Home Care employees performing Aged Care work
• Crisis Assistance and Supported Housing employees

Rather than having separate classification schedules for these different streams (as is the case now), all of these employees will have classifications determined by a new Schedule A, which is expressed in a much more simple way than the classification schedules it replaces.

From 1 October 2027 all new employees will have their classification level determined by the new classification schedule. 

Existing employees classified under the present classification system will have their new classification determined by the “translation arrangements” set out in the new Schedule B to the Award.

The new Schedule B contains a table of the current classification levels in the Award and which level current employees must transition to under the new classification regime. See pages 13 to 21 of the FWC’s draft determination.

Some of the new classifications will involve a modest pay increase for employees. Where however, the new classification involves a lower pay rate than their existing pay rate, existing employees must retain their existing rate of pay. In other words, they get the higher of their current rate of pay or the new rate of pay for their classification.

There will be no increase for employees transitioning to the new Level 1.1 or 1.2, or transitioning to Level 7.1 or higher.

Employers should therefore work out which classification existing employees will transition to on 1 October 2027 and be prepared to make any relevant pay adjustments. We would also recommend that existing employees are notified in writing of their new classification and any pay increase in advance of 1 October 2027.

We would, however, recommend that employers wait until a final version of the Award changes have been published, before this work is finalised, in case further changes are made, although any such changes are likely to be minimal. We expect to receive the final drafting of the Award changes later this year.

What does the new classification structure look like?

You can see the new classification structure set out in pages 45 to 51 of the FWC’s decision.

The new classification structure moves away from the complex descriptors in the current version of the SCHADS Award, which often involves making decisions about levels of autonomy and responsibility, which can be quite subjective.

In place, the new classification structure is mainly based on years of experience in the industry and whether the employee has a qualification that is relevant to their job. We make some observations on key features of the classification structure below, but this is no substitute for reading the classification descriptions in detail in the award.

Level 1 is reserved for employees doing administrative / operational support work, rather than providing any form of care work.

They must have less than 24 months’ relevant industry experience at Level 1 and can’t have relevant Certificate II qualification.

Level 2 is for Disability Support workers with less than 12 months’ industry experience and for Home Care employees (unless either type of employee has qualifications or experience entitling them to higher classification levels).

Level 2 is also for an employee who performs administrative/operational support work and who has more than 24 months’ relevant industry experience at Level 1 or who has obtained a relevant Certificate II qualification.

Level 3 is for employees who have a Cert III “whose role requires or involves, as a necessary part, performing duties substantially related to the qualification” or who do not have such a qualification, but work in a role which requires equivalent experience.

Disability Support workers (without qualifications) who have 12 months or more of relevant industry experience at Level 2 will also be classified as Level 3.

Level 4 is  for employees who have a Cert IV “whose role requires or involves, as a necessary part, performing duties substantially related to the qualification” or who do not have such a qualification but work in a role which requires equivalent experience.

Level 5 is for a Home Care employee who is required to train, co-ordinate and/or supervise volunteers or other employees at Levels 1-4 or who is required to schedule work programmes.

Level 5 is also for a Disability Support employee who:

1. supervises employees or volunteers in their day-to-day work; 
2. has overall responsibility for the personal care of residents/clients; 
3. trains, co-ordinates and/or supervises other employees and scheduling work programmes; or 
4. assists in liaison and co-ordination with other services and programmes.

It also applies to employees who have a Diploma “whose role requires or involves, as a necessary part, performing duties substantially related to the qualification” or who do not have such a qualification but who work in a role which requires equivalent experience.

Level 6 is for employees who are required to have an undergraduate degree by their employer or for an employee that “(b) does not have a relevant undergraduate degree or equivalent qualification but: (i) whose role involves as a necessary part, the performance of work of a kind which utilises the equivalent skills, knowledge and experience as an undergraduate degree qualification; or (ii) the employer considers the role involves skills, knowledge and/or experience (including through lived experience) of comparable value.”

Level 7 is mainly for an employee: “(a) who has a supervisory and/or training role over other employees including at Level 6 and/or volunteers; or (b) whose role involves undertaking responsibilities for various functions in a specialised area, exercising initiative in the application of established procedures or where there are not clearly established procedures; or (c) whose role involves providing expert guidance or professional supervision to other employees.”

Level 8 is mainly for employees with post-graduate qualifications or for an employee who: ”(b) does not have a post-graduate qualification or equivalent qualification but: (i) whose role involves, as a necessary part, the performance of work of a kind which utilises the equivalent skills, knowledge and experience as a postgraduate qualification; or (ii) the employer considers the role involves skills, knowledge and/or experience (including through lived experience) of comparable value;” 

It also applies to those who “exercises managerial responsibility, for example as a Team Leader (in a complex welfare setting) or Coordinator of a small service.”

Level 9 is for an employee who “(a) is a Caseworker/Practitioner employed as a practice expert and who operates independently or under limited direction. Indicative roles include expert practitioner or a member of a specialised professional team; or (b) is employed as a leader of a multidisciplinary team of professionals; or a manager of an occupational unit, program or project; or is part of a management team; or is a manager or coordinator of services”.

Level 10 is for an employee who “has been appointed to a senior managerial role and who: (a) exercises managerial responsibility for an organisation; or (b) may operate as a senior specialist providing multi-functional advice to other professional employees, the employer, Committee or Board of Management; or (c) may be required to have obtained a post-graduate qualification.”

It is important to note that not all of the levels apply to all sectors. For example, the highest level that can apply to an employee in the Home Care sector or that performs Disability Support work is Level 5.

“Disability support work” in this context is defined as “engaging with a person with disability to provide them with personal care or support by an employee whose employer is in the social and community services sector”.

How do employees progress through the new classification structure?

The new levels also include various different pay points, progression through which is subject to years of industry experience (generally after 12 months).

The FWC’s decision makes clear that for part-time and casual employees progression is based on continuous service, rather than hours of work. Therefore a part-time employee working 1 day a week, will be deemed to have 12 months continuous service after 12 months of employment. They will not need a longer period of employment based on hours of work.

However, a new clause 13.4 of the Award will state that: “An employee will not progress where they have not demonstrated competency and satisfactory performance, (for example, they have not acquired and satisfactorily used new or enhanced skills (if required by the employer)) against any documented standards of performance in a performance assessment conducted by the employer within the specified period”.

It will therefore always be open for an employer to not progress an employee to the next pay level if they do not consider they have developed new skills or performed well enough.

Clerical and administrative employees in the Home Care and Crisis Accommodation and Supported Housing Sectors.

A number of other matters are interesting to note from the FWC’s decision. 

Firstly, there was some discussion in the FWC’s decision about coverage for clerical and administrative employees in the Home Care and Crisis Accommodation and Supported Housing Sector (see pages 17 to 18 of the FWC’s decision).

The traditional understanding of the Award has been that clerical and administrative employees in the Social and Community Sector and Family Day Care Sector were covered by the SCHADS Award, but those in the Home Care and Crisis Accommodation and Supported Housing Sectors were covered by the Clerks Award.

Until recently, the Fair Work Ombudsman had an article on its website confirming this was its view on this matter, however this has now been removed.

The FWC’s decision does not make any definitive view on this, but its commentary calls into question whether it is correct for clerical and administrative employees in the Home Care and Crisis Accommodation and Supported Housing Sectors to be classified outside of the SCHADS Award.

Confusingly, the Award will contain a new broad definition of “administrative/operational support work” for the purposes of the new classification structure, but without making it clear whether or not this also applies to Home Care and Crisis Accommodation and Supported Housing Sector employees.

Rather the Award will simply say at a new clause 4.9: “The award does not cover employees not covered, or who would not have been covered by the classification structure of the award as at 30 September 2027.”

It is hoped that this matter may be considered again by the FWC before the new classification structure is finalised. In the meantime any Home Care or Crisis Accommodation and Supported Housing Sector employers with clerical employees should seek professional advice on award coverage for these workers.

Overlap with the Health Professionals and Support Services Award

Another interesting and highly confusing matter the FWC discussed in its decision is the overlap between the SCHADS Award and the Health Professionals and Support Services Award (Health Professionals Award). See pages 11 to 12 of the FWC’s decision.

Questions sometimes arise as to which of the SCHADS Award or the Health Professionals Award applies to employees because, for example, they both have coverage for counselling work. The traditional understanding is that where both awards can potentially apply to a particular role, the Health Professionals Award must take preference because the SCHADS Award contains a clause which states:

“4.2 The award does not cover employers and employees covered by any of the following awards:

1. Aged Care Award 2010;
2. Amusement, Events and Recreation Award 2010;
3. Fitness Industry Award 2010;
4. Health Professionals and Support Services Award 2010; or
5. Nurses Award 2010.” 

This has usually been understood to mean that where a SCHADS employer employs an employee in the list of health professionals in Schedule B of the Health Professionals Award (which includes professionals such as counsellor, social workers, youth workers, welfare workers and community development workers) they would come under the Health Professionals Award rather than the SCHADS Award.

However, in its decision, the FWC indicated that where a business is otherwise covered by SCHADS, and it employs a counsellor, social worker, youth worker, welfare worker or community development worker, these occupations would be covered by the SCHADS Award too, rather than the Health Professionals Award. It did not comment in respect of other occupations listed in the Health Professionals Award.

Given the complexity of resolving overlapping award-coverage between the SCHADS and Health Professionals Award, employers are encouraged to seek professional advice when determining award coverage.

Employment Hero’s HR Advisory can help you navigate these changes

Navigating award changes like these takes more than just reading through a few documents. 

Employment Hero’s HR advisory service gives businesses access to HR and employment specialists who can explain what the SCHADS Award changes mean in practice for your business.

Our team can help you work through requirements and translate them into practical steps, which is important when a classification structure overhaul like the one coming in October 2027 affects most SCHADS employees.

Want to learn more about our HR Advisory service? Get in touch with our business specialists today. 

The information in this article is current as at 3 July 2026 and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees and should not be relied on as professional advice. Some information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and seek professional advice before making any decisions or relying on the information in this article.