On 1 June 2026, the Fair Work Commission handed down its decision in the gender-based undervaluation review of the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award).
The Commission found that the existing classification structure and wage rates had been affected by gender-based undervaluation and that the current award framework was no longer fit for purpose. In particular, it considered the existing structure to be complex, inconsistent across streams, and prone to misclassification.
In response, the Commission has fundamentally restructured the SCHADS Award by introducing a new integrated classification structure, resetting minimum wage rates and removing the Equal Remuneration Order (ERO).
The new arrangements will apply from 1 October 2026 for employees currently covered by Schedule E (Home Care Employees—Disability Care) and otherwise from 1 October 2027.
For employers, the reforms will require a substantial reclassification, cost-modelling and implementation exercise.
New integrated classification structure
The Commission’s starting point was its earlier April 2025 finding that classifications and wages under the SCHADS Award had been systematically undervalued on gendered grounds, particularly in female-dominated care and community services roles. It also identified two structural deficiencies in the existing award framework:
- the division of work into multiple schedules (social and community services, crisis accommodation, home care, etc.) resulting in different rates for work of comparable value; and
- the classification descriptors themselves were often difficult to apply in practice, leading to widespread misclassification and compliance risks.
The Commission considered that these problems could not be addressed simply by adjusting rates within the existing framework and, therefore, decided to replace Schedules B, C, E and F with a single classification framework, the Final Classification Structure (FCS).
The FCS will:
- apply across all relevant sectors (social and community services, home care, crisis services and disability work);
- remove detailed, highly prescriptive role descriptors and instead rely on broader classification criteria; and
- align classification levels with qualifications and/or equivalent experience, rather than task-based distinctions.
The FCS also makes clear that employees without formal qualifications may still be classified at a particular level where their role requires equivalent skills, knowledge or experience, including lived experience. The Commission acknowledged that this model will require employers to make evaluative judgments about the equivalency of qualifications and experience.
Progression and classification mechanics
The Commission has also redesigned the way employees progress through the classification structure. It decided not to retain the existing annual increments, as they were not properly grounded in work value considerations.
Under the FCS, progression will occur after specified periods of relevant industry experience and will be contingent on an employee demonstrating competency and satisfactory performance. The Commission also rejected proposals for different progression criteria for part-time or casual employees, noting the potential gendered impact of such distinctions.
Wage outcomes and transitional protections
The Commission has set new minimum rates across the FCS, which incorporate and replace the existing ERO-adjusted rates. The ERO will be revoked on the basis that its effect has been absorbed into the new wage structure.
The wage outcomes will vary across the workforce. In particular:
- for employees performing social and community services work, administrative/operational support work, and crisis assistance and supported housing work, wage adjustments vary from a reduction of 1% to an increase of 17%; and
- for employees performing disability support work (particularly those previously outside the ERO), increases may be up to 27%.
The Commission has also introduced transitional protections to ensure existing employees do not suffer a reduction in pay. Where an employee’s current rate exceeds the new minimum, that higher rate will be preserved under the transitional arrangements.
Schedule E home care disability workers
A significant feature of the decision is the differentiated treatment of employees currently covered by Schedule E, who perform home care disability work.
The Commission concluded that the disparity between home care disability work and home care aged care work was unjustified, noting that both involve similar “invisible skills” and client interaction. To address that disparity, the Commission has proposed:
- an initial uplift of approximately 15% to Schedule E rates from 1 October 2026; and
- full alignment with the new classification structure on implementation of the FCS.
Key implications for employers
Although framed as a structural and equity-driven reform, the decision has significant practical and financial implications for employers across the sector.
First, employers will need to undertake a comprehensive reclassification exercise, mapping existing employees into the new structure by reference to their duties, qualifications and experience.
The move to a qualifications- and work value-based model is also likely to change the nature of classification disputes. Questions about whether duties are substantially related to a qualification, or whether experience is equivalent to a formal qualification, may become key points of contention.
Second, the decision will also increase wage costs, particularly in lower-paid and disability or home care segments of the workforce. Although the Commission has sought to confine increases to those required to address undervaluation, many employers will still face material labour-cost increases.
The Commission also reaffirmed its earlier view, expressed in the April decision, that the new classification structure will not require significant additional Commonwealth NDIS funding for disability support work. At the same time, employers are awaiting the NDIA Annual Pricing Review expected in late June, which will be critical to assessing the full financial impact of the reforms.
Finally, the shift to performance-based progression will require employers to implement or refine performance assessment processes to support progression decisions and reduce the risk of disputes where progression is withheld.
Key takeaways
The 1 June 2026 decision represents a substantial recasting of the SCHADS Award and will require active preparation by employers well before the commencement dates. Over the next 12 to 18 months, organisations will need to review classifications, model labour-cost impacts, update systems and prepare for disputes about classification and progression.
Although the reforms are intended to reduce complexity and improve consistency over time, the transition period is likely to involve significant compliance, cost and industrial risk, particularly for employers with large or lower-paid workforces.
Employers will need to map existing employees to the new Final Classification Structure and should begin workforce review, cost modelling and implementation planning well before the commencement dates.
If you would like any guidance on what these changes may mean for you, please reach out to our Employment Relations and Safety team.