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The Social, Community, Home Care and Disability Services (SCHADS) Award is undergoing its most significant overhaul in years. Following a lengthy review process by the Fair Work Commission, two major changes are now confirmed, one taking effect in October 2026, and a complete classification restructure from October 2027.
If your business employs staff covered by the SCHADS Awards, in disability support, home care, aged care, social and community services, or crisis accommodation, here's what's changing, when it applies, and what you need to do.
What is the SCHADS Award?
The SCHADS Award, formally the Social, Community, Home Care and Disability Services Industry Award 2010, sets minimum pay rates and employment conditions for workers across the social and communicty services sector in Australia. It covers a broad range of roles including disability support workers, home care workers, aged care workers, social workers, community service workers and crisis accommodation staff.
The sector's reliance on casual and part-time workers, complex shift structures and irregular hours has always made SCHADS Award compliance one of the more demanding payroll challenges for Australian employers. The upcoming changes make that task more significantly simpler to apply in the long run.
Already in effect: Sleepover changes from 1 June 2026
Before the October 2026 and October 2027 changes, one set of SCHADS Awards changes has already taken effect. From the first full pay period on or after 1 June 2026, the Fair Work Commission changed how rostering and pay worlds for shifts that include a sleepover, where an employee is required to stay overnight at the same location as a client.
The changes cover three areas:
Ordinary hours of work
Employees and employers can now agree to extend ordinary hours to up to 12 hours per shift where part of the shift falls immediately before and after a sleepover period, with a maximum of 8 ordinary hours in either work period. Overtime is payable for any time worked beyond 12 hours on those shifts.
Without an agreement in place, the existing 10-hour limit applies.
Roster breaks between rostered work
A sleepvoer period is no longer treated as a break betweeen rostered work. Work performed immediately before and after a sleepover is now treated as part of the same shift for the purpose of the 10-hour rest break rule.
Shift allowances and penalty rates
Where an employee works immediately before and after a sleepover, the two periods of work are considered separately when determining which shfit allowances apply. This means a single shift may attract different allowances for each work period, for example, an afternoon shift allowance for the pre-sleepover period and no loading for the post-sleepover period if it restarts after 6am.
If you employ staff on sleepover shifts, these changes should already be reflected in your payroll configurations.
Change 1: 15% pay increase for Disability Care workers in Home Care (1 October 2026)
The first significant change takes effect from the first full period on or after 1 October 2026 and is significant.
The Fair Work Commission has determined that employees covered by Schedule E of the SCHADS Awards, those providing Disability Care in Home Care setting, will receive a pay increase of approximately 15% of their minimum wage rates. The decision was made on gender undervaluation grounds. The Commission found that these roles, which have historically been performed predominantly by women, have been undervalued relative to comparable work, and that there is no reason to think the work value of employees servicing disability clients is any less than that of employees servicing aged care clients, who received a similar interim uplift in 2023.
The increase applies specifically to employees performing Home Care Disability work under Schedule E. It does not apply to Disability Support Workers in a community setting, or to Home Care workers in aged care under Schedule F.
The increase varies sligthly by classification level. For example, a Level 2 Pay Point employee moves from $1,046.90 to $1,203.90 per week, and a Level 3 Pay Point 1 employee moves from $1,068.40 to $1,228.70 per week from 1 October 2026. A further moderate increase will apply for these employees when the new Final Classification Structure takes effect in October 2027.
Employers with Home Care employees performing Disability Care work should prepare for a meaningdul increase in wage costs from October 2026. The rates in the FWC's decision are in draft form, with parties having 28 days to file submissions, but any ammendments are expected to be minimal.
Change 2: A completely new classification structure for all SCHADS employees (1 October 2027)
The second and larger change takes effect from 1 October 2027. This is a full replacement of the existing classification schedules (Schedules B, C, E and F) with a single, unified Final Classification Structure (FCS) for virtually all SCHADS employees. Familiy Day Care employees, covered by Schedule D, are not affected.
The new structure will apply to:
- 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.
Why is it changing?
The current SCHADS Award classification system has been found by the Fair Work Commission to be not fir for purpose. The division of coverage across different classification streams with different rates of pay has created complexity, inconsistency in how work is valued across streams, and widespread misclassification of employees. The new single structure is designed to be simpler, more transparent, and easier to apply and audit.
Key dates
What does the new classification structure look like?
The Final Classification Structure replaces complex descriptions involving subjective judgments about autonomy, responsibilities and experience with a clearer framework based primarily on qualifications and years of relevant industry experience.
The new structure runs from Level 1 to Level 10, with multiple pay points within each level. Not all levels apply to all sectors, for example, the highest classification available to employees performing Home Care or Disability Support work is Level 5.
Here's an overview of the levels and their minimum weekly rates:
What happens to existing employees?
Existing employees will not be left behind. Translation arrangements are set out in a new Schedule B to the Award, mapping current classification levels to their equivalent in the structure.
Where a translated classification results in a lowe pay rate than an employee currently received, the employee retains their existing rate, they receive whichever is higher. Employees at Level 1.1, 1.2, 7.1 and above will see no change in their rates.
New employees hired from 1 October 2027 will be classified under the new structure from the outset.
How do employees progress through this levels?
Each level includes multiple pay points, with progression generally based on 12 months of continuous service, with some exceptions. For example, Home Care employees progress from Level 3.1 to 3.2 after four years' relevant industry experience (counted from 1 January 2025), reflecting the different structure of that sector.
Importantly, progression is not automatic. Under clause 13.4, an employee must demonstrate competency and satisfactory performance within the specific period. Employers can withhold progression where this has not been demonstrated.
For part-time and casual employees, progression is based on continuous service, not hours worked, relfecting the Commission's view that imposing a full-time equivalent measure would have a disproportionate impact on women, who make up a large proportion of part-time workers in the sector.
A note on award coverage complexity
The FWC's decision also clarifies two important coverage questions that have caused confusion in the sector.
First, the decision confirms that employees such as counselors, social workers, youth workers, welfare workers and community development workers employes by SCHADS-covered organisations are covered by the SCHADS Award, not the Health Professionals and Support Services Award, where the employer is otherwiser covered by SCHADS.
Second, the decision leaves open the quetion of whether clerical and adminitrative employees in the Home Care and Crisis Accommodation and Supported Housing sectors fall under SCHADS of the Clerks Awards. The FWC declined to resolve this in the current view. Employers in these sectors with clerical staff should seek professional advice on award coverage given the ongoing uncertainty.
What this means for payroll compliance
The combination of a pay increase for a specific cohort of workers in October 2026, followed by a full classification restructure in October 2027, created a real compliance challenge for SCHADS employers. The FWC has explicitly recognised the scale of the change involved ans set the October 2027 commencement date to give employers sufficient time to prepare.
But preparation needs to start now. Employers should:
- Identify all employees covered by Schedule E and prepare for the wage increase from 1 October 2026.
- Begin reviewing current employee classifications against the translation tables in Schedule B to understand which level each employee will move to from 1 October 2027.
- Plan to notofy affected employees in writing of their new classification and anny pay changes in advance of October 2027.
- Review and update payroll software configurations to reflect both sets of changes ahead of their respective commencement dates.
Getting pay rates right under the SCHADS Award has always required careful configuration. The upcoming changes make accurate award interpreation more important than ever, and the risk of underpayment, which has been a recurring issue across the sector, increases when classification changes aren't handled correctly.
How Microkeeper helps SCHADS employers stay compliant
Microkeeper's controlled award interpretation engine is built to handle the complexity of Modern Awards like the SCHADS Award. Rather than relying on manual rate calculations or spreadhsheet patches, Microkeeper's payroll software allows you to conifgure pay ryles that reflect your specific award obligations, includinf classification levels, pay points, penalty rates, and allowances.
When the 1 October 2026 pay increase take effect for Schedule E employees, those rate changes will need to be reflected in your payroll configuration. And when the new Final Classification Structure takes effect in October 2027, Microkeeper's award interpretation tool gives you the flexibility to update employee classifications and pay rates in a structured, auditable way.
For organisations managing staff across mutiple SCHADS classifications or across different streams within the Award, having payroll softwaer that can be configured to your specific setup, rather than a one-size-fts-all rate table, is the difference between compliance and exposure.
This blog is intended as general information only and does not constitute legal or payroll advice. The FWC's draft determinations are subject to a 28-day submission period and minor amendments may follow. We recommend reviewing the full FWC decision and seeking professional advice for your specific situation. Monitor updates from the Fair Work Ombudsman at fairwork.gov.au.
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