Vehicle allowance case finalised: What ECEC providers need to know

The Fair Work Commission has finalised its examination of vehicle allowances across 41 modern awards, approving a temporary increase for employees covered by two care-sector awards, but not the awards commonly applied across early childhood education and care.

The Fair Work Commission (FWC) has concluded its major case examining applications to vary vehicle-related allowances across 41 modern awards.

The matter, formally known as Vehicle allowances, applications to vary multiple awards (AM2026/10 and others), has resulted in a targeted six-month increase under the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) and the Aged Care Award 2010.

Importantly for the early childhood education and care (ECEC) sector, neither the Children’s Services Award 2010nor the Educational Services (Teachers) Award 2020 has been varied.

However, the outcome may still have implications for organisations operating across childcare, community services, family support, disability support or other programs with employees covered by different awards.

Beginning on 14 April 2026, a number of unions applied to vary vehicle allowances across 27 modern awards in response to rising fuel costs associated with conflict in the Middle East.

Further applications expanded the proceedings to 41 awards, with the Australian Council of Trade Unions submitting that it was open to the Commission to consider all modern awards containing vehicle allowances.

The applications were made under section 158 of the Fair Work Act 2009 and brought together under case numbers AM2026/10, AM2026/11, AM2026/12 and AM2026/13.

An Expert Panel was established to hear and determine the applications, with the substantive hearing held on 18 May 2026.

On 26 August 2026, the Expert Panel issued Decision [2026] FWCFB 224, approving a temporary increase of four cents per kilometre under two awards.

From 1 September 2026 until 28 February 2027, the vehicle allowance will increase:

• from $1.01 per kilometre;
• to $1.05 per kilometre.

The increase applies only to the:

• Social, Community, Home Care and Disability Services Industry Award 2010; and
• Aged Care Award 2010.

The Commission did not vary any of the other awards considered during the proceedings. Its decision finalises the case.

For most ECEC services, the decision will not change the vehicle allowance payable to educators and teachers covered by the Children’s Services Award or Educational Services (Teachers) Award.

However, some organisations employ people across a range of programs and service types, which may result in different modern awards applying to different employees.

This can be relevant where an organisation delivers ECEC alongside community support, family assistance, disability or home-based programs. Whether the SCHADS Award applies depends on the employer’s operations, the employee’s role and the work they actually perform—it should not be assumed from a job title or work location alone.

OSHC, inclusion support, outreach and family support roles are not automatically covered by the SCHADS Award. Providers should confirm the correct award coverage for each position before applying the new rate.

Where an employee is covered by the SCHADS Award and is required and authorised to use their own motor vehicle in the course of their duties, the temporary rate may apply.

The allowance relates to eligible employees using their own motor vehicle for work purposes. It does not apply simply because travel forms part of a service’s operations.

For example, the decision does not automatically affect travel undertaken in a vehicle owned or supplied by the provider, including centre vehicles used for excursions or transport.

Providers should check the relevant award provisions, employment arrangements and internal travel policies to determine when an employee is entitled to reimbursement.

Organisations employing staff under the SCHADS Award should:

• identify employees who may be entitled to the allowance;
• update payroll and reimbursement systems before 1 September 2026;
• ensure eligible kilometres are recorded accurately;
• communicate the temporary rate to affected employees;
• check that travel authorisation and record-keeping processes are clear; and
• prepare for the temporary variation to end after 28 February 2027, unless the Commission makes a further change.

The decision also offers a timely prompt for all ECEC providers to review award coverage across their workforce, particularly where the organisation delivers services extending beyond traditional centre-based education and care.

The decision, formal determinations and complete case record are available from the Fair Work Commission.