Fair Work Commission decisions
◤ On this page
○ Award Wage Review
○ SCHADS Award review
○ VCOSS’ role
○ Other information
Fair Work Commission decisions: what they mean for our sector
The Fair Work Commission (FWC) has handed down two major decisions affecting Victoria’s community services sector. Both have significant implications for workers and organisations. VCOSS will continue to keep members informed as implementation progresses.
Annual Wage Review: award wages increasing from 1 July 2026
On 2 June 2026, the FWC handed down its Annual Wage Review decision, increasing modern award wages by 4.75 per cent and the National Minimum Wage by 6 per cent from 1 July 2026.
For community service organisations (CSOs) funded under under most service agreements with Victorian government departments, this decision impacts the indexation rate applied to that funding. Indexation under these service agreements is determined by a floating formula, based on 80 per cent of the annual wage decision and 20 per cent CPI. VCOSS anticipates that the indexation rate for 2026-27 will be 4.5 per cent.
VCOSS is continuing to engage with the Victorian Government to confirm timely indexation arrangements for the 2026-27 financial year, and to advocate for adequate funding and support in light of fuel prices and other sector pressures.
SCHADS Award – Gender-based Undervaluation Review
Landmark decision for community services workers
On 1 June 2026, the FWC handed down its final decision in the Gender-based Undervaluation Priority Awards Review for the SCHADS Award, confirming gender-based undervaluation of our sector’s workforce and mandating significant changes to award classification structure and pay.
You can read the full decision here: Decision [2026] FWCFB 137
The FWC’s decision largely implements a new award structure which was the subject of significant advocacy by VCOSS in close partnership with the COSS Network, including through a series of without prejudice conferences with interested parties late last year.
These are significant developments for our sector. The transition to the new award structure will be complex, but the decision also delivers real gains for community services workers, including clearer classifications, pay protection for existing workers, and formal recognition of lived experience alongside qualifications and experience.
Key outcomes include:
- A new Classification Structure will replace Schedules B, C, E and F of the SCHADS Award from 1 October 2027.
- Pay protection ensures that no existing employee’s minimum pay rate is reduced upon translation to the new Award. Where a worker’s current rate exceeds their translated rate, that current rate is retained so they do not go backwards.
- Lived experience is formally recognised alongside qualifications and equivalency.
- Progression is based on time in service, generally 12 calendar months, rather than hours worked, providing better protection for part-time and casual workers.
- Implementation will not occur until October 2027, to allow time to develop translation tools and ensure systems are ready for the change.
- Home care disability workers in Schedule E will receive an interim increase of around 15% from 1 October 2026, subject to further submissions on the FWC’s provisional view and final transitional steps.
What organisations should focus on now.
Organisations should:
- Note the key dates: the Schedule E interim increase takes effect from 1 October 2026, and the new SCHADS Award Classification Structure commences 1 October 2027.
- Begin internal conversations with HR, payroll and finance teams about workforce mapping, translation processes, budget impacts, and new starter classifications.
- Monitor further guidance from the Commission on implementation.
VCOSS’ role
VCOSS, alongside the COSS Network, has been deeply involved in this process – including through a series of without-prejudice conferences with interested parties, and formal submissions throughout 2025 and 2026. We are proud that several of our key recommendations have been incorporated into the final decision. Thank you to our members who provided feedback through our consultation processes.
We will continue to provide detailed member briefings, including practical guidance on the new structure, transition issues, and workforce impacts.
Stay informed
Subscribe to Amplify, our fortnightly sector newsletter, for ongoing updates on both decisions and their implementation: vcoss.org.au/subscribe
Support our advocacy
Join VCOSS as a member to access deeper support, resources, and a collective voice on issues like these: vcoss.org.au/join
Questions?
contact Julie Roberston, Director Community and Sector Development or Lyndsey Bateman, Project Coordinator, Community and Sector Development.
Other information
Service Agreement
A ‘Service Agreement’ is a formal contract between a community service organisation and the government department which funds its programs.
The 2020 – 2024 Service Agreement between the Victorian Government and Victorian community service organisations will expire on 30 June 2024.
The Service Agreement is the standard contract between a government department and an organisation funded to deliver services on its behalf. It is used by the Department of Families, Fairness and Housing (DFFH); the Department of Health; the Department of Education; and the Adult and Community Further Education Board.
The existing Service Agreement was last reviewed in 2019 through the Service Agreement Working Group which comprises sector and departmental representatives. The Working Group reports to the Human Services and Health Partnership Implementation Committee (HSHPIC), which has operated for almost two decades to promote and facilitate policy collaboration between government and the community sector.
The Working Group has recently reconvened to commence the consultation and negotiation process that will inform the 2024 – 2028 Agreement. The new Agreement is due to commence on 1 July 2024.
Key resources
Fair Jobs Code
Ahead of the 2022 Victorian election, the Victorian Government announced plans to introduce a ‘Fair Jobs Code’ for the community sector.
At the time it described this reform as “a set of standards that will assist community organisations with providing secure workplaces”.
The Code was finalised in September 2023, and will apply to organisations that receive direct funding of more than $2 million a year from the Victorian Government to “provide community services”.
The Code will take take effect from August 2024, and be reviewed after two years.
The Victorian Government has committed to communicate with organisations over the coming months to help them build an understanding of the Code and its obligations.
Key resources
Funding indexation
In September 2023, the Victorian Government confirmed it will introduce an agreed formula to calculate community sector funding increases for 2023/24 and beyond.
Under this deal, there will be a 5.45% funding boost in 2023/24 for about 800 organisations funded by the Victorian Government.
The funding formula used to calculate this boost takes account of obligations imposed by Fair Work Australia (80% of the increase) and CPI (20%).
The Victorian Government says the same formula will be used going forward.
Key resources
- Premier’s media release on Fair Jobs Code/indexation (September 2023)
Social Services Regulator
In mid-2022, the Victorian Government established a taskforce to support and guide the implementation of the new Social Services regulatory framework. VCOSS was represented on this taskforce.
The Transitional Regulations 2023 were finalised in November 2023. This document specifics when the new regime applies to specific services.
Following consultation and feedback, the Victorian Government made 24 changes to the Regulations, before before declaring them finalised.
On 1 February 2024, the Victorian Government announced Jonathan Kaplan as the new Social Services Regulator.
This announcement also details the government’s intention to fold the Disability Services Commission (DSC) into the new regulator straight away, and the Victorian Disability Worker Commission (VDWC) and Disability Worker Registration Board within two years.
Social Services Regulation Taskforce Communiques:
The Social Services Regulation Act 2021 (Vic) was passed in September 2021.
The purpose of the reforms was to address fragmentation, inconsistencies and gaps in the regulation of social services in Victoria.
The Act prescribes matters that can be included in regulations. The regulations will set out a number of significant matters required to operationalise the new regulatory scheme.
Other key resources
Community and Social Services Graduate Program
In June 2024, VCOSS facilitated an information forum – featuring speakers from DFFH – to brief the sector on how the new Victorian Government-funded program, designed to help organisations to:
- Recruit graduates with relevant Diploma, Bachelor or Masters qualifications to suitable vacancies in your organisation
- Provide enriched professional learning and development to eligible early career workers in your organisation (augmenting your investment in induction, orientation, training and supervision).
The session recording and resources can be found here.
VCOSS acknowledges the Traditional Owners of Country, and we pay respect to Elders and Ancestors. Our business is conducted on sovereign, unceded Aboriginal land. The VCOSS offices are located on Wurundjeri Woiwurrung land in central Naarm.