BREAKING: 4.75% wage rise from July: what aged care leaders need to know before the government responds

The Fair Work Commission handed down its Annual Wage Review decision on Tuesday 2 June, lifting minimum and award wages by 4.75% from 1 July 2026. For the lowest-paid 100,000 award workers, the increase is 6%. The National Minimum Wage rises to $26.44 per hour.

For aged care leaders, the immediate question isn’t whether the increase is fair. It’s whether it’s funded.

What was decided

The 4.75% applies to workers across the board, but specifically for our sector, it falls under the Aged Care Award and the SCHADS Award from the first full pay period on or after 1 July 2026. 

The Australian Nursing and Midwifery Federation welcomed the decision but had pushed for the full 6% the ACTU claimed. Federal Secretary Annie Butler called it “a step in the right direction” while noting that workers – majority female, many casual or part-time – are still catching up from years of systemic undervaluation.

This is not the same as the Work Value Case

This is where the complexity starts for providers.

The Aged Care Work Value Case increases – 15% in 2023, 3.5% in March 2025, further nurses’ increases in October 2025 – came with explicit Commonwealth funding commitments. The government adjusted AN-ACC subsidies and home care supplements specifically to cover those costs.

The Annual Wage Review doesn’t work that way. It applies across the whole economy. There’s no automatic funding mechanism, so unless the government announces a corresponding subsidy adjustment, providers are likely to absorb the cost.

A final Work Value Case increase for registered and enrolled nurses is still due on 1 August 2026. That one does have funding attached. The 4.75% Annual Wage Review increase is separate – and right now, its funding status for aged care is unconfirmed.

The question government hasn’t answered yet

At time of publication, neither the Department of Health and Aged Care nor the Minister has indicated whether AN-ACC funding rates or Home Support program subsidies will be adjusted to reflect the 4.75% increase.

This matters. 

Providers running on thin margins can’t effectively plan workforce costs without clarity on reimbursement. Peak body Ageing Australia has consistently argued that wage increases without matched funding create unsustainable pressure – particularly for smaller regional and rural providers.

Watch for a government response in the coming days. If none is forthcoming, this is the conversation the sector needs to have loudly and quickly.

What to do before 1 July

• Model your workforce costs now. Don’t wait for a government announcement. Run the numbers under both scenarios – funded and unfunded.
• Check your classifications. Some workers may qualify for the 6% floor. Know your award structure.
• Talk to your finance and payroll teams. The 1 August nurses’ increase lands five weeks after this one. Two increases in five weeks requires planning.
• Watch Ageing Australia and the Department of Health and Aged Care for any subsidy adjustment announcements.

The wage increase is welcome news for workers. Providers need the funding answer to match it.