The federal government will invest $630 million to ensure workers in the health, disability and community service sectors receive fairer pay.
The move comes after the Fair Work Commission found those industries have been undervalued as a result of gender-based assumptions and announced changes to five priority awards.
The money will be directed to more than 128,000 charities and not-for-profit organisations that deliver government programs in order to support wage increases.
The funding will also benefit government-funded workers in other sectors, including those working in housing, youth services, and community development.
Community and disability workers filed a claim with the Fair Work Commission in June seeking up to a 35 per cent pay rise for 300,000 Australian workers, arguing they are undervalued and overworked.
"I won't be able to provide for my family and likely I will need to leave the sector if things don't change," community lawyer Agata Nabaglo said at the time.
"Community workers deserve to have our skills and contributions recognised."
Australian Services Union secretary Emeline Gaske said in June that the workforce, primarily made up of women, has been underpaid for decades.
"As the sector continues to grow and demand for workers is surging, we cannot afford to lose workers because pay is failing to keep up with the cost of living. Something has to give, and that something is pay," she said.
Minister for Women Katy Gallagher said that Australia's gender pay gap was at a record low and that this was another step towards ensuring women were properly recognised.
The nation is now ranked eighth in the world for gender equality according to the World Economic Forum, up from the 43rd spot in 2022.
"We cannot close the gender pay gap without addressing the historic undervaluation of work performed predominantly by women," Senator Gallagher said.
"This move is also a clear signal to the community that this workforce and the support they provide our community is important and valued."
Health Minister Mark Butler said the investment would not only retain existing workers, but also make the sector more attractive to future workers, ensuring a stronger workforce in the future.
Social Services Minister Tanya Plibersek said that the workers provided crucial services during people's hardest moments.
"Whether it's supporting a woman escaping violence, helping a family facing homelessness, or making sure someone has a warm meal and somewhere to turn, these workers change lives every day," she said.
"Fairer pay will support a stronger, more sustainable community sector and ensure Australians can continue to access the services they need when they need them most."
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