Updated: Further clarification on the Fair Work Commission wage increase

Updated 21 June, 2023

DANA can now confirm that through the 2022-23 October Budget measure Support for Community Sector Organisations, the Albanese Labor Government is providing additional funding over four years to 2025-26 to assist Community Service Organisations (CSOs) that may be facing additional cost pressures due to the Fair Work Commission’s minimum wage decision and higher inflation pressures.

The funding from this measure is on top of the regular indexation payments made to the grant recipients, and you do not need to apply for this funding. This financial year, the supplementation funding was significantly above the 5.3% previously requested by the sector.

This additional funding is being provided to support CSOs to maintain a strong and independent community services sector and is consistent with the Australian Government’s election commitment to value the work of the community services sector.

As was the case this financial year, National Disability Advocacy Program and NDIS Appeals providers are eligible to receive the CSO supplementation funding next financial year. It is intended the 2023-24 supplementation and indexation process will commence in the first quarter of the 2023-24 financial year.

Original post 8 June, 2023

A number of members have expressed concern about the 5.75% increase to the modern award minimum wage announced by the Fair Work Commission (and the 0.5% superannuation increase) from 1 July 2023 and the impact it will have on their budget, including whether the government will be covering the increase in its grant agreements with advocacy organisations.

As a matter of urgency, DANA followed this up and DSS has advised in the following terms:

• Indexation is applied by the Department of Finance each year, which is designed to maintain the real value of grants and takes into account a range of economic factors. It has generally been applied to grants in the second half of the financial year. Given the impact of economic factors, the government is considering this timing, however at this stage DSS cannot provide definitive advice on this.
  
• The 2022-23 October Budget measure Support for Community Sector Organisations provided supplementary funding over four years to 2025-26 to assist the Community Sector Organisations (CSOs). It is also intended to address economic factors impacting CSOs. The funding from this measure is on top of the regular indexation payments made to the grant recipients.
• DSS is currently working through an internal process to determine the distribution of the supplementation funding across all eligible grant programs, before informing the sector on payment timing and the indexation and supplementation amounts for specific grant programs.