‍The Fair Work Commission has handed down two separate decisions affecting the SCHADS Award in 2026. Most employers are only planning for one of them.

The Social, Community, Home Care and Disability Services Industry Award is one of Australia's largest modern awards, covering hundreds of thousands of employees across the disability, home care, community services and social assistance sectors. In 2026, it is the subject of two entirely separate Fair Work Commission decisions, each with its own effective date, its own obligations, and its own financial consequences. Treating them as a single "annual update" is one of the most expensive mistakes an NDIS provider, home care organisation, or community services employer can make right now.

Two decisions, not one

The first decision is routine. The Fair Work Commission's 2026 Annual Wage Review, handed down on 2 June 2026, confirmed a 4.75% increase to all modern award minimum wages from the first full pay period on or after 1 July 2026. The SCHADS Award is a modern award, so every classification and pay point under the award increases by 4.75%. If your payroll system applies SCHADS rates, those rates need updating before your first applicable pay run.

The second decision is not routine. On 1 June 2026, the Fair Work Commission Full Bench handed down a landmark ruling restructuring the SCHADS Award following a multi-year review into gender-based undervaluation. This is a separate determination from the Annual Wage Review. It has different commencement dates, affects different parts of the award at different times, and requires employers to take very different actions.

Understanding that distinction is the foundation of everything that follows.

What the gender undervaluation decision actually means

The Commission found that the existing SCHADS classification structure had been affected by longstanding gender-based undervaluation. The award's multiple overlapping schedules—Schedules B, C, E and F—were found to be complex, inconsistent across employment streams and capable of contributing to classification issues. The outcome is a significant structural reform rather than an incremental wage adjustment.

The decision introduces three practical obligations for employers, each applying at a different point in time.

From the first full pay period on or after 1 July 2026: Apply the standard 4.75% Annual Wage Review increase to all SCHADS classifications. This is the immediate action required.

From the first full pay period on or after 1 October 2026: Schedule E home care disability workers are expected to receive an interim wage increase of 15% for most classifications, subject to the Fair Work Commission finalising the determination. Two classifications receive slightly different increases (14.96% and 13.31%). Schedule E covers home care employees performing disability care work. The Commission found these employees have historically been paid lower rates than equivalent aged care home care workers performing substantially similar work, a disparity it concluded had no proper work value basis. For organisations employing Schedule E workers, this is the most significant planning obligation beyond the July wage increase. Budget modelling should begin well before October.

From 1 October 2027: A new Final Classification Structure replaces the current SCHADS classification schedules. Schedules B, C, E and F are replaced in full. As part of the implementation package, the Fair Work Commission has published draft orders to revoke the existing Equal Remuneration Order. Every employer covered by the SCHADS Award will need to map their existing workforce to the new classification levels by reference to employee duties, qualifications and experience. This is a genuine reclassification exercise, not simply a pay rate update.

What leaders typically get wrong

The most common failure is treating the July obligation as the complete picture. Payroll teams update rates, confirm the new minimums are in place, and mark SCHADS off the list. The October and 2027 obligations are then pushed aside until "closer to the time."

That approach carries two material risks.

The first is financial. An interim wage increase of 15% for most Schedule E classifications from the first full pay period on or after 1 October 2026 represents a significant uplift to labour costs for organisations employing home care disability workers. For NDIS providers, the funding model adds another layer of complexity. The Commission acknowledged that current NDIS pricing has historically reflected Schedule B rates, including the Equal Remuneration Order, while Schedule E workers performing substantially similar work have received lower award rates. The NDIA has now released its 2026–27 Annual Pricing Review and Pricing Schedule, giving providers greater clarity on funding arrangements. Even so, organisations should not delay modelling the financial impact of the October wage increase.

The second risk is classification. The move to the Final Classification Structure in 2027 is not a copy-across exercise. The Commission identified structural issues within the existing classification framework, meaning employers should not assume existing classifications will automatically translate to the new structure. Classification decisions will need to be assessed against employees' actual duties, qualifications and experience rather than job titles or historical award levels.

What the three-stage timeline looks like in practice

Responsible planning treats the SCHADS changes as a staged programme of work rather than a series of isolated compliance tasks.

Stage one – July 2026: Update all SCHADS classification rates by 4.75%, verify the correct commencement date (the first full pay period on or after 1 July), and ensure penalty rates, loadings and allowances linked to award minimum rates are also updated where required.

Stage two – preparation for October 2026: Identify all employees currently covered by Schedule E, model the financial impact of the interim wage increase (15% for most classifications), begin discussions with finance and, where relevant, funding bodies, and monitor the Fair Work Commission case page for the final determination and implementation orders relating to the Schedule E changes.

Stage three – preparation for October 2027: Begin workforce classification mapping well before the commencement date. For organisations with large SCHADS-covered workforces, this represents a substantial HR and payroll project. The new structure is based on work value, qualifications and duties, meaning classification decisions require genuine assessment rather than a simple comparison between old and new pay rates.

The compliance exposure is real

The SCHADS Award covers workers across a predominantly female workforce within disability support, community services and home care. Underpayment within these sectors has attracted sustained attention from the Fair Work Ombudsman, while the Commission's gender undervaluation findings signal continued regulatory focus on correct classification and award compliance.

Organisations that fail to implement the October Schedule E changes once finalised risk underpayment liabilities from the applicable commencement date. Organisations that incorrectly classify employees under the new 2027 framework may face the same kinds of compliance risks that have driven this award review in the first place.

Award interpretation automation removes much of the manual risk from both obligations. OAHI's Award Managed Service manages award updates, payroll compliance on request from employers, helping translate Fair Work Commission award changes before they take effect. For organisations managing SCHADS alongside multiple modern awards or enterprise agreements, a managed approach can significantly reduce compliance risk.

The SCHADS reforms across 2026 and 2027 are not background noise. They represent a significant structural change. The July increase is already here. The October changes are approaching quickly. Organisations that begin planning now will be in a far stronger position than those treating these reforms as just another annual wage increase.

OAHI helps organisations manage award interpretation, payroll compliance and workforce management across Australia. For support implementing the SCHADS Award changes, contact the OAHI team or learn more about OAHI's Award Managed Service.

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