On 1 June 2026, the Fair Work Commission handed down a decision that will fundamentally reshape pay and classification across Australia’s social, community, home care, and disability services sectors.
The [2026] FWCFB 137 decision finalises a two-year gender undervaluation review of the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award). The Commission found that the existing classification structures had been affected by longstanding gender-based undervaluation and that the award framework itself was no longer fit for purpose.
The result is the most significant structural change to the SCHADS Award in over a decade. For employers covered by the award, this is not a matter to monitor from a distance. Preparation starts now.
What the Commission decided
The Commission replaced the current classification structures in Schedules B, C, E, and F with a single integrated Final Classification Structure (FCS). The existing system, spread across multiple schedules with different rates, different streams, and inconsistent descriptors, was found to be complex, prone to misclassification, and no longer reflective of the work value of a predominantly female workforce.
The new structure creates a single classification framework across six defined work streams: administrative and operational support, social and community services, crisis assistance and supported housing, disability support, home care aged, and home care disability. Ten classification levels replace the existing multi-schedule system, with minimum rates anchored to qualification and relevant industry experience.
The Equal Remuneration Order currently applying to Schedule B employees will be revoked when the new structure commences. The minimum rates in the FCS incorporate those ERO rates, so the revocation does not represent a reduction for affected employees.
The two key dates
1 October 2026 — Schedule E interim pay increase (provisional)
Employees currently covered by Schedule E — Home Care Employees, Disability Care — are in line for an interim pay increase of approximately 15 per cent from 1 October 2026.
This is currently a provisional determination. Parties have 28 days from 1 June 2026 to file submissions on this view. Until the Commission finalises its position, the October 2026 increase should be treated as likely but not yet confirmed. Employers with Schedule E employees should begin workforce and budget planning on this basis now, while monitoring for the finalised determination.
1 October 2027 — Full Final Classification Structure commences
The new single classification structure takes effect for all covered employees. At this point, Schedules B, C, E, and F are replaced in full, the ERO is revoked, and the translated pay rates apply across all work streams.
This date is confirmed.
What changes for employers, and when
For Schedule E employers (disability home care), act before October 2026
If your workforce includes employees classified under Schedule E, the provisional 15 per cent increase is your most immediate planning obligation. The practical steps:
- Identify all employees currently classified under Schedule E
- Model the wage cost impact of a ~15 per cent increase from 1 October 2026
- Monitor the FWC case page for finalisation of the determination
- Begin conversations with your finance team and, where applicable, your funding body
NDIS providers should note that the Commission acknowledged the current NDIS funding model is based on Schedule B rates inclusive of the ERO. The wage rates for disability support workers performing the same work under Schedule E have been anomalously lower, a disparity the Commission described as having no proper basis. This change rectifies that position.
For all SCHADS Award employers, prepare for October 2027
The classification overhaul affects every employer covered by the SCHADS Award. The transition from the current multi-schedule structure to the single FCS will require:
- Mapping your existing employees to the new classification levels
- Reviewing employment contracts and position descriptions against the new structure
- Updating payroll systems to reflect translated rates and progression rules under clause 13.4
- Identifying any employees whose existing rate exceeds their translated FCS minimum, pay protection provisions apply, and no current employee’s minimum rate will reduce as a result of translation
The Commission has been explicit that the current structures are expressed in terms that make it difficult to determine the correct classification level, resulting in widespread misclassification across the sector. The new structure is designed to be simpler. That does not make the transition straightforward. Organisations with large or varied workforces will need time and specialist support to complete it accurately.
Three things to understand about the new structure
Qualifications and equivalent experience are both recognised
The FCS does not require employees to hold formal qualifications to access higher classification levels. The structure explicitly recognises equivalent experience and training, including lived experience, as a basis for classification. This is a deliberate design choice reflecting the Commission’s view that the social and community services sector places genuine value on skills acquired outside formal study.
Progression is not automatic
Classification progression under the new structure requires demonstrated competency and satisfactory performance. Calendar time alone is not sufficient. Employers will need to ensure their performance management and review processes are capable of supporting and documenting progression decisions under clause 13.4 of the new award.
The current misclassification problem does not resolve itself
The Commission found that the existing structures have produced widespread misclassification across the sector. Translation to the new FCS does not automatically correct that position. Employers who have been applying the wrong classification level will need to identify and rectify those arrangements as part of the transition, not wait for the new structure to do it for them.
What this means alongside the sleepover changes
The 1 June 2026 decision is separate from the sleepover shift changes that also took effect from the first full pay period on or after 1 June 2026. Both decisions affect SCHADS Award employers, but they address different obligations. If you are still working through the sleepover changes, those remain your immediate compliance priority. The classification overhaul operates on a longer planning horizon. However, that horizon requires action now, not in 2027.
For a full overview of the sleepover changes, see our earlier post: SCHADS Award sleepover shifts: what every NDIS and community services employer needs to know.
How Strategic HR Australia can help
The SCHADS Award is one of the most complex modern awards in Australia. The 2026 and 2027 changes compound that complexity significantly. Getting the translation right, and getting it right on time, requires more than reading the determination.
Strategic HR Australia works directly with NDIS providers and community services employers on award interpretation, compliance reviews, and workforce planning. If you are working through what these changes mean for your organisation, speak with us before decisions are made that are difficult to unwind.
Get in touch with Strategic HR Australia to discuss your obligations under the new SCHADS Award structure.
