The Fair Work Commission is there to make sure that Australian employers are compliant with their Modern Awards.
Unfortunately, however, these awards end up being so complex and highly specific that we find that many employers aren’t actually complying - especially when it comes to the SCHADS Industry Award.
To add a level of complexity to the pages of legal jargon, the award sets a different minimum wage depending on your employer’s occupation level, qualifications, and experience.
Beyond that, each level has its own pay points.
So, you need to carefully consider what classification your employee falls under because this will determine their correct pay rate.
It’s not enough to just guess what level or pay point your employee sits at. So, to help guide you on pay rates and pay point progressions, here’s everything you need to know.
The Social, Community, Home Care and Disability Services Industry (SCHADS) Award sets out the minimum pay rates, pay levels, and employment conditions for workers in the community and social services sectors. If you’re managing payroll for NDIS or care providers, understanding SCHADS pay rates and classifications is essential to ensure compliance and avoid underpayment risks.
The SCHADS Award provides a framework for how employees must be classified and paid. It outlines:
If you’re an NDIS provider or running a care-based business, it’s crucial to understand how the SCHADS Award applies to your staff. Misunderstanding or misapplying SCHADS pay rates and levels can lead to serious compliance issues, including underpayment claims and Fair Work investigations.
All employees in Australia are entitled to a minimum wage. For employees covered under the SCHADS Award, this means being paid according to their specific classification and pay level.
The SCHADS Award sets minimum pay rates based on the type of work employees perform, their qualifications, experience, and responsibilities. In addition to base pay, employees may also be entitled to:
The Fair Work Commission reviews and updates SCHADS pay rates every year, typically in July. Staying up to date with these changes is essential for employers to remain compliant.
👉 Need the latest rates? Download our SCHADS Award Pay Rate Cheat Sheet included in the SCHADS Award eBook.
The SCHADS Award groups employees into four broad employment streams:
Each of these streams contains classification levels, often referred to as pay levels, which determine an employee’s minimum pay rate. Classifications are based on factors like:
There are eight levels within this stream:
Each level has a different minimum wage. As employees progress from Level 1 to Level 8, both their responsibilities and pay rates increase accordingly.
Why Classifications Matter
Accurately classifying your employees under the SCHADS Award is critical. Misclassification can result in underpayments, which may lead to legal action, fines, and reputational damage.
Within each SCHADS pay level, there are pay points that allow employees to progress to higher pay rates without changing their classification.
Pay point progression usually depends on factors such as:
Progression through pay points provides a structured pathway for employees to increase their earnings over time while remaining within the same classification level.
An employee at Level 1 might start at Pay Point 1 and progress to Pay Point 3 over time.
Employers must ensure they understand the pay point progression rules within the SCHADS Award and apply them correctly.
Under the SCHADS Award, Level 1 Social and Community Services Employees follow clear pay point progression rules:
For example, an employee responsible for all domestic duties under general supervision—including cleaning, food preparation, and helping residents with personal care—must be classified at Level 1, Pay Point 2 from the beginning of their employment.
Such employees may then be eligible to progress to Pay Point 3 after a further 12 months of continuous service and satisfactory performance.
The SCHADS Award also sets out specific pay point progression rules for employees classified under Levels 2 and 3 within the Social and Community Services stream.
These employees typically have completed an appropriate qualification, such as a Certificate III or IV, and are required to perform work related to that qualification.
After 12 months of satisfactory performance and full-time equivalent service, Level 2 employees are eligible to advance to the next pay point, provided they have demonstrated competency and have used any new skills acquired during that period.
Level 3 employees are generally required to have a three or four-year tertiary qualification relevant to their role.
Level 3 employees can move through the subsequent pay points after 12 months of continuous employment and satisfactory performance at each pay point.
It’s important to accurately assess qualifications and responsibilities to ensure employees are appointed at the correct starting pay point under the SCHADS Award. Incorrect classification or underpayment at this level can lead to compliance issues and potential penalties.
The SCHADS Award also specifies pay point progression rules for Crisis Accommodation Employees at Level 1.
Graduates who are required to perform duties directly related to their qualifications and who undertake responsibilities relevant to Crisis Accommodation roles should be paid no less than Pay Point 2.After 12 months of satisfactory full-time equivalent service at Pay Point 2, these employees are eligible to progress to the next pay point (Pay Point 3), as long as they meet competency and performance requirements.
This system ensures that qualified employees undertaking more complex responsibilities are fairly compensated from the start of their employment.
For SCHADS employees and classifications not covered by specific progression rules, the General Pay Point Progression Clause applies.
Who This Applies To
These groups do not have unique progression rules set out in the SCHADS Award. Instead, the general clause governs how they can move through the pay points within their level.
General Progression Rules:
💡Important Clarification:
The Federal Court has clarified that the term eligible does not mean an automatic progression. Instead, it’s at the discretion of the employer to determine whether the employee has met the criteria to move to the next pay point.
Employers must assess employees fairly and reasonably. It’s best practice to implement clear policies and maintain documentation outlining decisions around pay point progression to avoid potential disputes.
Managing SCHADS pay rates and pay point progressions can be complex, but getting it wrong can have serious consequences. Non-compliance can lead to employee underpayments, backpay orders, fines, and reputational damage.
Three Steps to Ensure Compliance:
By staying informed and implementing structured systems, you can reduce your risk of non-compliance.
If this process sounds overwhelming, Pay Cat can help automate and manage compliance, giving you peace of mind.
Manually managing SCHADS pay rates, levels, and progression rules can be time-consuming and risky.
At Pay Cat, we provide cloud payroll solutions specifically designed for businesses operating under complex modern awards like SCHADS.
Book a free demo with Pay Cat today and see how easy it can be to automate your SCHADS payroll compliance.
Understanding the SCHADS Award can be complex, but having the right tools makes compliance easier. We’ve compiled key resources to help you stay on top of your payroll, rostering, and compliance obligations.
🔗 Download the SCHADS Award eBook + Pay Rate Cheat Sheet – Everything you need to know about SCHADS, including wage classifications, pay points, and allowances.
🎥 Watch Our Free SCHADS Webinars
Common Shift Calculations Explained
Designing a SCHADS Time and Attendance Workflow
ShiftCare and Pay Cat Integration: Guarantee Payroll compliance with SCHADS, Awards and Enterprise Agreements
👩🏼💻 Watch the first part of our SCHADS course for free!
Mastering the SCHADS Award
📄 Download our independently reviewed report to discover why Pay Cat’s SCHADS payroll solution is the only one that guarantees 100% SCHADS compliance.
Pay Cat are payroll specialists dedicated to helping Australian businesses simplify payroll and ensure 100% compliance with modern awards. As Employment Hero Payroll experts, we provide tailored solutions that streamline payroll processes, reduce errors, and save time. For SCHADS businesses, our industry-first, 100% compliant SCHADS interpreter template guarantees accurate award interpretation and automation.