The Australian federal government will commit 630 million Australian dollars to fund pay rises for more than 460,000 care sector workers after a Fair Work Commission ruling found gender undervaluation in female-dominated wage awards.

The package will raise pay in health, disability, and community service sectors, addressing undervaluation identified by the Fair Work Commission.

Labor ministers and union representatives emphasized the social importance of the sector, including supporting women escaping violence, reducing homelessness, and maintaining access to essential services.

Health Minister Mark Butler said the changes will help retain workers and make the care sector a more attractive career path.

Officials linked pay to workforce retention and attractiveness, with Butler noting the goal of retaining current staff and drawing in new workers.

Funding will also support government-funded organisations in related sectors such as legal assistance, housing, youth services, and First Nations health and community programs.

The package targets workers in added sectors, benefiting government-funded roles across housing, youth services, and community development.

Overall, the package aims to deliver fairer pay, strengthen the future workforce, and ensure Australians can access needed community services.

Finance Minister Katy Gallagher said the move addresses historic undervaluation of work predominantly performed by women and aims to close the gender pay gap, calling the gap at a record low."

Minister for Women Katy Gallagher stressed recognizing the sector’s value to society and addressing decades of undervaluation.

Funding is allocated to over 128,000 organisations across 92 programs in health, disability care, and community services to implement the wage changes while maintaining service continuity and equality.

A June collective claim from community and disability workers pushed for up to a 35 percent pay rise for about 300,000 workers, arguing undervaluation and heavy workload.