Modern awards for employees with disability
From 1 January 2010, modern awards cover most workplaces and replace most pre-modern awards (except enterprise awards, applying to a single enterprise).
Employees with disability who are covered by a modern award will often have their pay rates and conditions specified in their modern award.
Transitional arrangements in most modern awards mean that some monetary entitlements (including minimum wages) do not commence until the first full pay period on or after 1 July 2010. These arrangements give employers and employees time to adjust to the changes by allowing new pay rates to be phased in over a period of four years until the full modern award rates apply from the first full pay period on or after 1 July 2014. In this period minimum rates are determined by reference to the employee’s pre-modern award entitlements as well as the relevant modern award entitlements.
Employees with disability who are not covered by a modern award may continue to be covered by their pre-modern award, or a special national minimum wage.
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Special national minimum wage for employees with disability
The Minimum Wages Panel of Fair Work Australia has set two special national minimum wages for employees with disability who are not covered by an award or agreement. These special national minimum wages will come into effect from the first full pay period on or after 1 July 2010.
Disability that does not affect productive capacity
Special national minimum wage 1 applies to award and agreement free employees with a disability that doesn’t affect the way they can do their job (i.e. it doesn’t affect their productive capacity). These employees must receive at least $569.90 per week (before tax), or $15 per hour (as rounded to the nearest 10 cents).
Disability that does affect productive capacity
Special national minimum wage 2 applies to an award and agreement free employee with a disability that does affect the way that they can do their job (i.e. their productive capacity) can be assessed under the supported wage system to earn a percentage of the full special national minimum wage for employees with disability of (which is $569.90 per week (before tax), or $15 per hour (as rounded to the nearest 10 cents).
This percentage is based on the employee’s assessed productive capacity. For example, if an employee has an assessed productive capacity of 70%, they could be paid 70% of the national minimum wage (i.e. 70% of $15).
This will only apply if the employee:
- is unable to perform the range of duties at a certain level because their disability affects their productivity
- meets the impairment criteria for receipt of a Disability Support Pension
- has had their productive capacity properly assessed by the
Department of Education, Employment and Workplace Relations (DEEWR).
Pre-modern awards for employees with disability
Employees with disability may have been covered by one of the following pre-modern awards:
- the relevant pay scale for their job
- a special Federal Minimum Wage (No.1 or No. 2)
- a special Supported Wage System (SWS) pay scale
- a special Business Services (employees with a disability) pay scale.
The pre-modern award entitlement for an employee with disability will depend on:
- what their job is,
- whether their disability affects their 'productive capacity' to do a job, and
- whether they work in open employment or in an Australian Disability Enterprise.
Pre-modern award where the disability does NOT affect productive capacity
For many employees with disability, their disability doesn't affect the way they do their job (i.e. it doesn't affect their 'productive capacity').
Until the first full pay period on or after 1 July 2010 these employees must be paid their full pre-modern award entitlement. If they aren't covered by a pay scale, they can get the rate set out in special Federal Minimum Wage No. 1. This is equal to the rate in the standard Federal Minimum Wage - $14.31 per hour.
From the first full pay period on or after 1 July 2010 the minimum pay rates for these employees will usually either:
- begin phasing to the modern award rates (where a modern award covers them that includes the model transitional provisions),
- continue to be determined by the pre-modern award (if there is no modern award covering them and the pre-modern award was a pay scale), or
- be the special national minimum wage of $569.90 per week (before tax), or $15 per hour (if there is no modern award covering them and the pre-modern award was the special federal minimum wage).
Pre modern award where the disability DOES affect productive capacity
Employees with disability, whose disability affects aspects of their productive capacity to do a job can be paid a percentage of the full rate of pay under the Supported Wage System. This percentage is based on their assessed productive capacity. For example, if an employee has an assessed productive capacity of 70%, they could be paid 70% of the standard national minimum wage (i.e. 70% of $15.00).
This only applies if the employee:
- is unable to perform the range of duties at a certain level because their disability affects their output
- can get the Disability Support Pension or would be eligible for this pension if they didn't have to meet Australian residency requirements
- had their productive capacity properly assessed by the Department of Education, Employment and Workplace Relations (DEEWR).
The pre-modern award covering employees with an assessed capacity will depend on whether they are employed in open employment, or employed in Australian Disability Enterprises.
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Open employment
Open employment exists where an employee with disability is engaged in the mainstream workforce, in a commercial setting, along with fully productive employees.
Employees in open employment who whose disability affects their productive capacity will be covered by one of the following pre-modern awards:
- the relevant pay scale for their job, with supported wage system provisions
- the special Supported Wage System pay scale
If an employee is covered by a pay scale that doesn't include supported wage system provisions, they can be covered by the Special Supported Wage System pay scale. This gives them access to pro-rata Supported Wage arrangements.
- the special Federal Minimum Wage No 2.
If there is no pay scale that covers an employee with an assessed productive capacity, they can be covered by the special Federal Minimum Wage No. 2. This pre-modern award has supported wage system levels in it based on an employee's assessed productive capacity.
From 1 July 2010 the pay rates for these employees will either:
- begin phasing to the modern award rates (where a modern award covers them)
- continue under the pre-modern award (if there is no modern award covering them and the pre-modern award was a pay scale)
- be the special national minimum wage (if there is no modern award covering them and the pre-modern award was the special Federal Minimum Wage).
Need more information?
Call the Fair Work Infoline on 13 13 94.
Need more on the supported wage system?
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Australian Disability Enterprises
Australian Disability Enterprises are businesses (all currently non-profit organisations) that provide employment for people with disability who generally require support to remain in paid employment.
When an employee begins a new job, the employer grades them based on their skills, experience and qualifications. The employee is paid the percentage of the relevant hourly rate for their grade. This is based on their assessed capacity, using an approved wage assessment tool.
Prior to 1 January 2010 Disability Enterprises were covered by one of the following:
- the Pay Scale derived from the Liquor, Hospitality and Miscellaneous Union Supported Employment Services Award 2005 (the LHMU pay scale),
- the Special Business Services Pay Scale (the SBS pay scale), or
- the Cooma Challenge Limited Business Services (State) Award (and its derived pay scale).
Disability Enterprises and their employees previously covered by the LHMU pay scale or the SBS pay scale are likely to be covered by the Supported Employment Services Award 2010 [MA000103]. From 1 July 2010 employers and employees covered by this modern award will begin phasing to the modern award rates.
Any employees previously covered by the LHMU pay scale or the SBS pay scale who is not covered by the Supported Employment Services Modern Award or any other modern award will continue on their pre-modern award rates.
Employees previously covered by the Cooma Challenge Limited Business Services (State) Award, will continue to be covered by that enterprise award. Enterprise Awards are not replaced by modern awards.
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