Aged care, home care and disability workers who use their own vehicles for work will receive a temporary increase to their vehicle allowance from 1 September, following a decision by the Fair Work Commission.
The allowance will rise from $1.01 to $1.05 per kilometre for employees covered by the Aged Care Award 2010 and the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award).
The increase will apply for six months, until 28 February 2027, and is intended to help workers absorb higher motoring costs, including fuel, maintenance and other expenses associated with using a personal vehicle for work.
The Commission’s decision followed applications from unions seeking changes to vehicle allowances across a much wider range of modern awards.
The Fair Work Commission considered applications covering 41 awards, but ultimately limited the temporary increase to the two care sector awards. Applications relating to the other 39 awards were rejected.
The increase is particularly relevant to workers who travel regularly between people’s homes as part of their jobs.
Under the SCHADS Award, employees can be entitled to a vehicle allowance when they are required and authorised to use their own vehicle for work. This can include travelling between clients or transporting food, medication or laundry for a client.
For many home care and disability workers, particularly those working across outer-suburban, regional and rural areas, travelling can make up a significant part of the working day.
The Commission’s decision comes after a period of substantial volatility in fuel prices.
According to evidence considered in the case, the national average retail petrol price reached 253.4 cents per litre in late March 2026, while diesel reached a peak of 319 cents per litre in April. Fuel prices were affected by international tensions and disruption to oil supplies, while changes to fuel excise also altered the cost faced by motorists during the year.
The Commission ultimately calculated the temporary allowance using the increase in petrol prices over the relevant period. The calculation produced an allowance of 105.14 cents per kilometre, which was rounded to $1.05.
The application was led by Australian Unions, with several unions involved in the proceedings, including the Australian Nursing and Midwifery Federation, Health Services Union, Australian Services Union and Transport Workers’ Union.
ACTU President Michele O’Neil welcomed the decision, saying the increase would provide some relief to community and aged care workers facing higher costs at the petrol pump.
However, unions had sought a broader increase across dozens of awards and were disappointed that the Commission did not extend the decision to other workers, including those in retail delivery, maintenance trades and firefighting.
The final decision therefore represents a narrower outcome than the unions had originally sought.
The change also has implications for providers, who will need to ensure their payroll systems reflect the new rate from the relevant pay period.
The Commission’s determinations specify that the $1.05 rate applies during the period from 1 September 2026 to 28 February 2027. The existing $1.01 rate will apply outside that temporary period, subject to future changes to the awards.
Importantly, the Commission has made clear that the temporary increase is not treated as a permanent adjustment to the underlying vehicle allowance.
This means it will not alter the calculation of future expense-related allowance adjustments under the awards.
The Fair Work Commission has already updated its Modern Awards Pay Database to reflect the temporary changes, with the updated expense-related allowances published on 27 August.
For providers already operating under tight margins, the increase adds another cost at a time when many organisations are managing rising wages, insurance, fuel and other operating expenses.
For workers, however, the change provides a modest buffer against the cost of using a personal vehicle to deliver care and support.
At $1.05 per kilometre, the difference from the current rate is only four cents for every kilometre travelled. For workers covering substantial distances each week, that can still add up over time, particularly in roles where travelling between clients is a routine part of the job.
The temporary increase will remain in place for six months, after which the allowance will revert to the applicable rate unless further changes are made.
