How the Annual Wage Review works
The Annual Wage Review is conducted by the Fair Work Commission Expert Panel under section 285 of the Fair Work Act 2009. It is not run by the Fair Work Ombudsman, which is a separate agency responsible for compliance and enforcement.
The Expert Panel reviews the National Minimum Wage and all modern award minimum rates. The SCHADS Award (MA000100) is a modern award, so its minimum rates are adjusted by the AWR outcome. The same percentage applies across all SCHADS classification levels, from Level 1 through Level 8, in both the Social and Community Services stream and the Home Care stream.
The Expert Panel accepts submissions from unions, employer associations, and other interested parties from February to April. It considers economic indicators including inflation, wages growth across the broader economy, and the capacity of industries to absorb cost increases. The written decision is typically published in June, giving providers around two to four weeks before the 1 July effective date.
Regulatory reference
Fair Work Act 2009, s.285 (Annual Wage Reviews). SCHADS Award MA000100, clauses 15 (classification definitions), 20 (minimum weekly wages), 25 (hours, minimum engagement, and travel time), 28 (broken shifts), and 29 (sleepover shifts).
When do the new rates actually apply
The new rates are not automatic from 1 July. They apply from the first full pay period that starts on or after 1 July 2026.
For weekly payroll cycles, the new rate typically applies from 1 July or from the Monday of the first week starting after 1 July, depending on your pay period structure. For fortnightly payroll cycles, the new rate may not apply until 7 July or even 13 July, depending on where your pay period falls.
| Pay cycle | Example pay period start | New rate applies from |
|---|---|---|
| Weekly | Monday 29 June | Monday 6 July |
| Weekly | Tuesday 1 July | Tuesday 1 July |
| Fortnightly | Monday 22 June | Monday 6 July |
| Fortnightly | Monday 29 June | Monday 13 July |
Examples only. Check your actual pay period calendar. Paying the old rate beyond the first applicable pay period is an underpayment, even if the decision was only published a few weeks earlier.
Recent Annual Wage Review outcomes
We will not predict the 2026 percentage. What the Expert Panel decides depends on economic conditions at the time of the decision. For context, here are the outcomes from the previous four years.
| Financial year | Increase |
|---|---|
| 2022-23 | 5.75% |
| 2023-24 | 3.75% |
| 2024-25 | 3.5% |
| 2025-26 | 3.5% |
Source: Fair Work Commission Annual Wage Review decisions 2022-23 through 2025-26.
The NDIS pricing interaction: the provider squeeze
The NDIS Pricing Arrangements and Price Limits are also reviewed annually, with changes typically taking effect from 1 July. Both reviews happen in parallel, but the NDIS price limit movement and the SCHADS Award increase are decided independently by different bodies.
When the Award increase exceeds the NDIS price limit increase for a support category, providers absorb the difference. This is the structural squeeze that disability support providers have faced in several recent financial years.
What to do: Once the FWC decision is released, compare the Award percentage increase with the NDIS Pricing Arrangements update for the support categories you deliver. For any category where the labour cost increase outpaces the price limit increase, calculate the per-hour margin impact and update your financial modelling before you commit to service agreement renewals.
This is also the point at which to review any SIL or community access quotes in progress, since cost models built on last year's rates will be understated.
7-step provider checklist before 1 July
Run through this checklist once the FWC decision is published. The decision usually drops in June, giving you two to four weeks. The checklist is relevant regardless of the percentage increase.
Update payroll system pay rates
Update every SCHADS classification level your organisation uses: base rates, casual loading amounts, and allowances. If your payroll system applies penalty rates as multipliers, confirm the multiplier is being applied to the new base rate. Cached rate tables are a common source of underpayment after a July update.
Update all SCHADS allowances
Award allowances are indexed separately and must be updated at the same time as base rates. Check broken shift allowance (clause 28), sleepover allowance, on-call allowance, vehicle km rate, meal allowance, first aid allowance, and telephone allowance. Allowance omissions are one of the most common findings in Fair Work audits of care providers.
Confirm superannuation guarantee rate
The Superannuation Guarantee rate reached 12% from 1 July 2025 and is legislated at 12% indefinitely. No further SG increases are scheduled beyond that date. Ensure your payroll system reflects 12% and is not carrying forward an older rate.
Recalculate NDIS price-limit headroom
NDIS Pricing Arrangements are also reviewed annually for 1 July, but the percentage change in the NDIS price limits does not always match the SCHADS Award increase. If the Award increase exceeds the NDIS price limit movement for a support category, your margin on that category will compress. Model this before July, not after.
Review enterprise agreements against the SCHADS floor
If your organisation operates under an Enterprise Agreement, the EA rates must remain above the SCHADS Award floor at every classification level and for every entitlement type. This is the Better Off Overall Test (BOOT). After an Award increase, re-check that your EA still passes the BOOT. If it does not, you must pay whichever is higher.
Communicate pay changes to workers in writing
Fair Work Act 2009 requires employers to notify employees of changes to their pay. Where possible, provide written confirmation of the new rate before the first pay period at the new rate. This is also good practice for transparency and avoids worker queries about why their pay changed.
Update quotes, service agreements, and cost models
Any service agreement, SIL quote, or internal cost model built on the previous year's labour rates should be updated to reflect the new base rates and allowances. If your agreements allow price variations linked to Award changes, issue updated schedules to participants. Where agreements specify a fixed rate, assess whether the new Award minimum creates a gap.
The rate change is not automatic in payroll software
Some payroll platforms claim to apply Award updates automatically. Do not assume this will happen correctly without verification. Award updates require a system provider to release and deploy a rate update, your organisation to apply it, and your local pay rate configuration to be aligned with the update. Each of these steps can fail silently.
After 1 July, run a spot check: pull the base rate for at least one worker at each classification level you use and confirm the rate in your payroll system matches the published SCHADS Pay Guide from the Fair Work Ombudsman. If there is a discrepancy, correct it immediately and back-pay any shortfall from the first applicable pay period.
Underpayment risk: Paying below the Award minimum is a contravention of the Fair Work Act regardless of whether the error was caused by a software issue. The obligation to pay the correct rate rests with the employer. The Fair Work Ombudsman can order back-payment plus interest and penalties.