Government Announces $630 Million to Support Wage Increases in Community Services Sector
The Commonwealth Government has announced a $630 million funding package to assist charities and not-for-profit organisations meet increased wage costs arising from recent Fair Work Commission decisions addressing gender-based undervaluation in female-dominated industries.
Announced on 12 October 2026, the funding is intended to support wage increases affecting more than 460,000 workers across the health, disability and community services sectors.
The Government has confirmed that more than 128,000 organisations funded under 92 Commonwealth Government programs will receive additional funding to assist with the implementation of award-related wage increases.
Background to the Wage Increases
The funding announcement follows the Fair Work Commission’s Priority Awards Review, which examined whether minimum award rates in certain female-dominated industries had been affected by historical gender-based undervaluation.
Of particular significance to community services employers is the Commission’s decision of 1 June 2026, which determined that changes were necessary to the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award).
The decision provides for substantial changes to the Award’s classification structure and minimum rates of pay, including a new classification framework scheduled to commence on 1 October 2027. Certain disability home care employees will also receive an initial increase of up to 15% to their minimum award rates from 1 December 2026.
These changes are separate from the annual wage increases determined through the Commission’s Annual Wage Review.
What Will the $630 Million Fund?
The Commonwealth Government has indicated that the additional funding will assist organisations delivering federally funded programs to meet the increased employment costs associated with the Commission’s decisions.
The funding will extend to organisations delivering services in areas including:
- Disability and community support services
- Housing and homelessness assistance
- Youth services and community development
- Legal assistance services
- First Nations health and community programs
The Government has emphasised that the funding is intended to ensure organisations can implement the required wage increases while maintaining essential services.
Importantly, the announcement relates to Commonwealth-funded programs. It should not be interpreted as a commitment to reimburse every employer for all additional wage costs arising from the Award changes.
Implications for Employers
The funding announcement will be welcomed by many community services organisations that rely heavily on government funding to meet employment costs. However, employers will need to carefully assess the financial implications of the Award changes, particularly where services are funded through a combination of Commonwealth, state government and other funding arrangements.