Care and Support Workers Pay Equity Settlement — 2026 Guide for NZ Providers

The Care and Support Workers Pay Equity settlement is one of the most significant workforce changes in the NZ disability and aged care sector. It established qualification-linked minimum pay bands for support workers — recognising that the sector had systematically undervalued work performed predominantly by women. For providers, it created ongoing obligations around tracking qualifications, paying at the correct band, reporting workforce data accurately to funders, and keeping records that demonstrate compliance.

This guide explains how the settlement works in practice, what providers must do to stay compliant, and how to manage the workforce budget implications as your team's qualifications evolve.

Pay rates are set by legislation and reviewed periodically. Verify current minimum rates with Health New Zealand (Te Whatu Ora) or your funder. Last reviewed: Aug 2026.

What Is the Pay Equity Settlement?

The Care and Support Workers (Pay Equity) Settlement Act 2017 resolved a pay equity claim brought on behalf of home, community, and residential care workers. The claim established that workers in these roles were paid less than workers in comparable male-dominated sectors despite equivalent skill and responsibility. The settlement created minimum pay floors significantly above the general minimum wage, structured by qualification and experience.

Funding to meet the increased pay rates flows from government to contracted providers — providers are not expected to absorb the cost from existing margins. However, correct administration of the bands, accurate qualification tracking, and timely funder reporting are provider responsibilities.

Who Does It Cover?

The settlement covers workers who spend more than 50% of their working time delivering direct care and support services. This includes:

• Home and community support workers (personal care, domestic assistance, community participation support)
• Residential disability support workers in group homes, SIL settings, and respite houses
• Aged residential care workers (rest home, dementia, hospital-level)
• Workers employed under Individualised Funding (IF), Enhanced Individualised Funding (EIF), and Enabling Good Lives (EGL) hosted personal budgets

Workers primarily in coordination, administration, or clinical roles above the support worker level are generally not covered, though they may be covered by other collective agreements. If a worker's role is borderline — significant admin duties alongside direct support — assess the actual time split rather than assuming.

Casual and bank workers are covered on the same basis as permanent staff. The settlement does not create an exemption for casual employment. If a casual worker delivers covered services for more than 50% of their hours, they must be paid at the correct band rate.

How the Pay Bands Work

Pay is determined by the worker's highest relevant qualification, mapped to the NZ Certificate in Health and Wellbeing (NZCHW) framework. The four bands are:

• Band 1 — No qualification: Entry-level rate. Workers without a relevant qualification who haven't yet completed study.
• Band 2 — NZCHW Level 2: Workers holding a Level 2 certificate or an assessed equivalent. Higher base rate than Band 1.
• Band 3 — NZCHW Level 3: Recognises additional skills, competency, and the ability to work with more complex support needs with less supervision.
• Band 4 — NZCHW Level 4: Advanced practice. Workers at this level typically handle complex behavioural or health support, may mentor others, and take on coordination elements.

Qualification must be from an NZQA-accredited provider, or formally assessed as equivalent. The NZCHW framework is available through Careerforce (now Te Pūkenga / Workforce Development Councils) and a range of private training establishments.

Service Recognition Increments

Beyond qualification bands, the settlement includes a service recognition component — incremental pay increases based on verified years of service in the care and support sector. Critically, service recognition is sector-wide, not employer-specific. A worker with eight years of experience across three different providers carries their service history with them when they join your organisation.

This means when you hire an experienced support worker from another provider, you must verify their service history and pay them at the correct service recognition tier from day one — not reset them to zero because they're new to your organisation. Failure to do this creates underpayment liability from their first week.

Overseas Qualifications

Workers who completed relevant qualifications overseas (UK, Australia, Philippines, India, and many other countries) may be entitled to a higher band without completing NZ study. The qualification must be formally assessed for equivalency by the relevant body before being applied to band placement. This process takes time — build it into your onboarding checklist rather than defaulting overseas workers to Band 1 and correcting later.

Provider Obligations

Verify Before You Pay

Before placing a worker in a pay band, you must sight and record their qualification evidence:

• Original certificate from an NZQA-accredited provider, or a certified copy
• Official transcript confirming unit standard completions if the full certificate isn't yet issued
• Overseas qualification assessment outcome letter (if applicable)
• For service recognition: employment references, payslips, or a statutory declaration if documentary evidence is unavailable

Document what you sighted, the date, and the band assigned. This forms the audit trail if your funder or the worker ever queries the placement.

Update Pay When Qualifications Change

When a worker completes a qualification — whether during their time with you or arriving with a newly completed certificate — their pay must increase from the date the qualification is awarded, not from their next scheduled salary review or the following pay cycle.

This requires an active process: workers need to know to notify you when they complete study, and you need a system to capture that notification and act on it promptly. Retroactive pay corrections after months of incorrect banding create administrative burden, payroll complications, and damaged trust with the worker.

Report Workforce Data Accurately

Pay equity funding is calculated based on your workforce profile — the number of workers at each qualification band and their hours. You must submit accurate workforce data to your funder for funding calculations. Inaccurate data creates mismatches:

• Under-claiming — if you have workers at Band 3 but report them as Band 1, you receive less funding than you're entitled to. You're effectively subsidising the funder's underpayment risk from your own margin.
• Over-claiming — if you report workers at a higher band than their verified qualification supports, you're receiving funding you haven't earned. This is a compliance and recovery risk.

Audit your workforce profile at least quarterly and update funding claims when the profile changes — don't wait for the annual review.

Workforce Budget Implications

Qualification Progression Increases Your Wage Bill

As workers complete qualifications and move up bands, your labour cost per hour increases. This is intended — the funding system compensates for it. The risk is timing: workers complete qualifications and expect higher pay, but if you haven't updated your funding claim, you're bridging the gap from your own funds.

Track expected qualification completion dates for every enrolled worker. When a completion is approaching, prepare both the payroll update and the funder claim update so they happen simultaneously.

Recruitment Implications

When advertising roles, state the applicable pay band clearly. Experienced workers joining from other organisations may arrive at Band 3 or 4 with significant service recognition — your payroll system must accommodate this from their first pay period. A common mistake is advertising a role at Band 1 (to preserve budget flexibility) and then discovering the hired worker is entitled to Band 3 — the gap between what was advertised and what must be paid creates budget pressure and sometimes tension with the worker.

Casual Workforce Complexity

Many disability providers rely heavily on casual workers for flexibility. Casual workers covered by the settlement must be paid at the correct band rate for every shift. The Pay Equity rate is a floor that sits below whatever casual loading or other entitlements also apply — it's not an alternative to other minimum entitlements, it's an additional floor.

Track each casual worker's qualification and service history just as carefully as permanent staff. A casual worker on your books for three years who completed their Level 3 last year needs a band update just as much as a full-time permanent worker.

Record-Keeping Checklist

For every covered worker, maintain these records and ensure they're accessible for funder review:

• Qualification certificates — originals sighted, copies on file with a note of when sighted
• Service history documentation — employment references, payslips from previous care employers, or statutory declaration
• Date of band assignment and the specific evidence that justified it
• Date of any subsequent band changes and the trigger (new qualification, service recognition increment, overseas assessment outcome)
• Current pay rate and how it maps to the applicable band
• Funder workforce profile submissions and the dates they were submitted

Common Mistakes Providers Make

These are the patterns that generate underpayment claims, funder corrections, and compliance notices:

• Default Band 1 for all new starters — experienced workers or qualified workers are placed at Band 1 "until we verify their documents." Verification must happen before their first shift, not as a deferred task.
• Resetting service recognition to zero — treating every new hire as a fresh start regardless of their sector experience. Service recognition transfers with the worker.
• Missing qualification completions — no process to capture when enrolled workers finish study, so band updates don't happen until someone notices or the worker escalates.
• Not updating the funder claim — the workforce profile changes but the funder claim isn't updated for months. The funding gap is absorbed by the provider.
• Assuming the settlement doesn't apply to IF/EIF employers — individuals using Individualised Funding who employ their own support workers are also covered by the Act. This is a common misconception.

If you're managing pay equity compliance across 15+ workers in a spreadsheet, the likelihood of a gap is high — not because of bad intent but because the volume of moving parts exceeds what manual tracking reliably handles. See how KareShift tracks Pay Equity bands and qualification records for NZ providers.