Paying employees correctly under the SCHADS Award requires more than simply checking an hourly rate. Employers must understand how classification levels, pay points, qualifications, and performance all interact to determine minimum wage obligations.
In this video, Pay Cat breaks down how minimum wages and pay point progression operate across the SCHADS Award streams, including Social and Community Services, Crisis Accommodation, Family Day Care, and Home Care.
This guidance is essential for avoiding underpayments, Fair Work investigations, and costly compliance risks.
All employees covered by the SCHADS Award must be paid at least the minimum wage. Minimum wages are guided by classification levels and pay points, which depend on an employee’s role, qualifications, experience, and employment type. Correctly identifying an employee’s classification is critical, as it directly determines their lawful pay rate.
An employee’s level under the SCHADS Award is usually based on their qualifications or experience. Within each level, the award includes multiple pay points. After completing 12 months of continuous employment, an employee may be eligible to progress from one pay point to the next if their performance has been competent and satisfactory. Eligibility does not guarantee progression—moving an employee to a higher pay point is always at the employer’s discretion.
All employees in Australia are entitled to a minimum wage. This refers to gross pay before tax and does not include penalty rates or allowances, which are paid in addition to the base rate. Each year, the Fair Work Commission reviews minimum pay rates under the SCHADS Award, so employers must stay up to date with annual changes.
Minimum wages under the SCHADS Award are grouped into four streams:
Social and Community Services employees are classified across eight levels, based on responsibilities, job requirements, and expertise.
Each level attracts different minimum wage rates, with higher levels paid more than lower levels.
Within each classification level, the SCHADS Award includes multiple pay points. The award sets out specific rules about where employees commence and how progression is handled.
For certain Level 1 employees, progression from Pay Point 1 to Pay Point 2 may occur after 12 months of relevant industry experience gained within the previous three years. Industry experience must relate directly to the duties performed.
Some Level 1 employees may start on Pay Point 2 immediately if they perform a full range of domestic duties under general supervision, such as cleaning, food services, and assisting residents with personal care.
Level 2 Social and Community Services employees who hold an appropriate certificate and perform duties related to that qualification are generally classified at Level 2. If the qualification is a Certificate IV, the employee must commence on Pay Point 2. After completing 12 months of satisfactory service, they may progress to the next pay point.
For Level 3 employees, qualification requirements also affect starting pay points. Employees with a three-year degree performing Level 3 duties must start at Pay Point 3, while those with a four-year degree must start at least at Pay Point 4.
For Levels 4 to 8, and where no specific progression rules apply, the general pay point progression clause governs advancement.
Under this clause, an employee may be eligible to progress after 12 months of continuous employment if they have demonstrated competency, satisfactory performance, and have acquired and used enhanced skills through on-the-job training.
A recent Federal Court decision clarified that the word “eligible” is critical. Employees do not automatically progress through pay points. Employers retain full discretion when deciding whether pay point progression occurs.
In the Crisis Accommodation stream, Level 1 employees who hold a four-year degree and perform duties relevant to that qualification must start at least at Pay Point 4. Graduates undertaking Level 4 crisis accommodation responsibilities must be paid no less than Pay Point 2.
Levels 2 and 3 Crisis Accommodation employees do not have specific pay point rules, so the general pay point progression clause applies.
For Family Day Care and Home Care employees, there are no level-specific pay point provisions. Progression for all levels in these streams is governed entirely by the general pay point progression clause.
Minimum wage rates and pay points under the SCHADS Award are reviewed annually. Fair Work publishes updated pay guides each year outlining rates for every level and pay point across all streams.
Failing to correctly classify employees can result in underpayments, back pay obligations, significant penalties, and reputational damage if investigated by the Fair Work Ombudsman. Because pay point progression is discretionary, employers must ensure decisions are made fairly, consistently, and reasonably.
Implementing a clear internal policy for pay point progression is strongly recommended to support compliance and reduce risk.
Minimum wages are determined by the employee’s classification level, pay point, qualifications, experience, and the stream they fall under within the SCHADS Award.
No. Employees may be eligible for progression after 12 months, but progression is not automatic and remains at the employer’s discretion.
It allows employees to be considered for progression after 12 months of satisfactory performance and skill development where no specific progression rules apply.
Minimum wage rates are reviewed annually by the Fair Work Commission, with updated pay guides released each year.
Incorrect classification can lead to underpayments, back pay requirements, fines, penalties, and potential public enforcement action by Fair Work.
If you want to see how Pay Cat automates SCHADS Award compliance, including allowances, penalties, and shift conditions, you can learn more here:
https://www.paycat.com.au/schads