What changed

The Fair Work Commission increased the vehicle allowance under the Aged Care Award and the Social, Community, Home Care and Disability Services (SCHADS) Award from $1.01 per kilometre to $1.05 per kilometre. The increase is temporary: it takes effect from the first full pay period commencing on or after 1 September 2026 and finishes on 28 February 2027.

Who made the change

This rate change is the result of a Fair Work Commission variation to those awards. The Fair Work Ombudsman (FWO) has published guidance and updated its Pay and Conditions Tool to reflect the new rate; the FWO is a separate regulator from the Commission.

Stage 1‑relevant measures

  • Temporary increase to vehicle allowance for eligible employees covered by the Aged Care Award and the SCHADS Award: $1.05/km (was $1.01/km), effective from the first full pay period commencing on or after 1 September 2026, ending 28 February 2027.

Timing and payroll application

The new rate applies from the first full pay period commencing on or after 1 September 2026. For employers, that means the allowance takes effect at the start of your next qualifying pay period rather than part‑way through a pay period that started before 1 September. The FWO’s example describes a payroll officer who updates payroll settings and notifies staff so the new rate appears on payslips from the correct pay period.

What this does not change

This announcement only changes the per‑kilometre vehicle allowance rate for the two awards named. It is not a change to classification structures, ordinary hourly rates, overtime rules, or NDIS participant funding arrangements. It does not in itself create or alter individual entitlements under NDIS plans or service agreements.

What this could mean in practice

  • For workers who travel regularly between clients or to activities, modest additional reimbursement for work‑related kilometres will be paid while the temporary rate applies.
  • For employers, particularly providers of home care and disability services with mobile staff, there is a small uplift in labour costs for reimbursed travel during the six‑month period and a practical payroll task to update systems and communications.

What to do now (practical steps)

  • Employers and payroll teams: update payroll settings so the $1.05/km rate applies from the first full pay period commencing on or after 1 September 2026; confirm which employee classifications are eligible under the relevant award; and notify affected staff about where the allowance appears on payslips.
  • Workers: check payslips from the first qualifying pay period after 1 September 2026 and keep accurate records of kilometres claimed; raise any concerns with your employer or seek advice from your union or the Fair Work Ombudsman.
  • Everyone: use the FWO’s updated Pay and Conditions Tool and the published pay guide for the relevant award to check calculations.

What to watch next

  • Employers should track payroll cut‑off dates so the allowance is applied from the correct pay period and confirm whether any backpay is required if the increase is applied late.
  • Confirm which classifications and roles within your organisation are covered by the SCHADS or Aged Care awards; not every staff member in community services is necessarily covered.

Bottom line

A temporary, six‑month increase to the vehicle allowance for employees covered by the Aged Care and SCHADS awards moves the rate to $1.05 per kilometre. The change is effective from the first full pay period on or after 1 September 2026 and ends on 28 February 2027. Employers should update payroll and communicate with affected staff; workers who use private vehicles for work should check their payslips and keep travel records.