The great SCHADS shakeup: what employers need to know

The biggest SCHADS Award shake-up in years has arrived, with the FWC’s 1 June 2026 decision delivering a major overhaul of the Award’s classification structure and minimum pay rates.

If you employ staff in social and community services, crisis accommodation, home care or disability care, this is the most significant change to employee pay and classifications the sector has seen in years. Under the new rates, a Certificate III employee will earn at least $1,579 per week, with senior classifications exceeding $2,500.

Depending on how your employees are currently classified, some could see pay rises of up to 28%, creating significant cost and compliance implications for employers.

There are two key dates to put in your calendar:

• 1 October 2026 – interim pay increase of 15% for Home Care and Disability Care employees (Schedule E).
• 1 October 2027 – new classification structure takes full effect for all covered employees.

‘Two Birds, One Stone’: Why did the FWC change the SCHADS Award’s Classification Structure and increase award rates of pay?

The changes stem from a FWC review launched in 2024 into whether work covered by five key modern awards, including the SCHADS Award, had been undervalued on a gender basis.

In its 16 April 2025 decision , the Commission found the classification structures in Schedules B (Social and Community Services), C (Crisis Accommodation), and E (Home Care – Disability Care), along with their associated wage rates, had been affected by gender-based undervaluation.

It also found that the SCHADS Award classification structures and the pay rates were not ‘fit for purpose’, noting that in some cases there was ‘widespread misclassification’.

As a result, the Commission adopted a ‘two birds, one stone’ approach, proposing a draft classification structure that would address the problems with the SCHADS Award’s existing classification structures and also increase the minimum rates of pay that had been affected by gender-based undervaluation.

You can read the Commission’s decisions in full below:

16 April 2025 Decision

1 June 2026 Decision

What’s changing?

The current SCHADS Award has separate classification structures across multiple schedules: Schedule B (Social and Community Services Employees), Schedule C (Crisis Accommodation Employees) and Schedule E (Home Care Employees – Disability Care), among others. From 1 October 2027, these will be replaced by a single unified structure that covers all employee types.

The key features of the new structure:

• One classification structure to replace all existing schedules.
• Translation tables to help you map current roles to new classifications.
• Qualification-based definitions – whether an employee holds a Certificate III, Certificate II or equivalent experience is now central to their classification.
• No complex evaluative judgments – the new structure is designed to be straightforward to apply.
• Pay rates built on the Caring Skills Benchmark Rate, resulting in a general upward shift across the board.

What do you need to do and when?

This is a significant piece of work. Here’s how to approach it.

Before 1 October 2026:

Review whether you employ staff under Schedule E (Home Care – Disability Care). If you do, those employees are entitled to a 15% interim pay increase from the first full pay period on or after 1 October 2026. Update your payroll accordingly.

Before 1 October 2027:

• Check your current classifications. Before you can apply the new structure, you need to be confident your employees are correctly classified under the existing one. If there are gaps here, fix them first.
• Reclassify all covered positions under the new structure using the Commission’s translation tables.
• Update position descriptions to reflect the new classification definitions, both for your current team and for future hiring.
• Review employment contracts to make sure they remain current and legally sound given the new pay rates and classifications.
• Meet your consultation obligations. The SCHADS Award requires you to consult with affected employees about changes to their classification and pay. No employee should receive a reduction in minimum pay as a result of reclassification.
• Review any over-award payments. If you currently pay above the award rate, consider how the new minimum rates interact with those arrangements.
• Factor in government funding. NDIS providers and others operating under government funding arrangements should monitor how the Commission’s changes interact with NDIA pricing guidance and any updates to support documentation.
• If you have an enterprise agreement or are considering one, get advice now on how these changes affect your obligations.

The bottom line

The 1 October 2027 deadline may feel distant, but reclassifying the relevant employees, updating contracts and position descriptions, and meeting your consultation obligations takes time, particularly if your current classifications may not be accurate.

The businesses that get this right early will avoid the disputes, underpayment claims and employee relations issues that tend to follow rushed implementation.

If you’re not sure where to start, talk to your Citation Legal adviser. We’ll help you work through the classification process, understand your consultation obligations, and make sure you’re ready before the deadlines hit.

Speak to us today. 

Our Authors 

Zoe McQuillian – Special Counsel at Citation Legal

Michal Roucek – Partner at Citation Legal