Fuel Prices Are Surging and Workers Are Paying Out of Pocket: The Urgent FWC Case to Lift Vehicle Allowances Across 27 Awards

A 35% fuel price surge is hitting Australian workers where it hurts most: their wallets.

For the hundreds of thousands of employees who rely on personal vehicles for work, every kilometre driven on the job now costs significantly more than the allowance meant to cover it. Nurses making home visits, disability support workers travelling between clients, aged care staff moving across facilities, fast food delivery drivers on the road for hours: all of them are effectively subsidising their employer’s operations out of their own pockets.

On 14 April 2026, the Australian Council of Trade Unions (ACTU) filed an urgent application with the Fair Work Commission to increase vehicle allowances across 27 modern awards. The case numbers are AM2026/10, AM2026/11, AM2026/12 and AM2026/13, and the implications are wide-reaching.

Here is what you need to know.

What Is a Vehicle Allowance Under a Modern Award?

A vehicle or motor vehicle allowance is a per-kilometre payment designed to reimburse employees who use their own car for work purposes. It is meant to cover fuel, maintenance, insurance, registration and depreciation. Under most modern awards, the current rate sits at approximately 99 cents per kilometre.

The problem is straightforward: that rate was set when fuel prices were considerably lower. With petrol and diesel costs climbing more than 35% since early 2026, the 99c/km figure no longer reflects the real cost of running a vehicle.

Why Now? The Fuel Price Crisis Explained

The surge in fuel prices is not a gradual trend. It is a direct consequence of the escalating Middle East conflict and disruptions to shipping through the Strait of Hormuz, one of the world’s most critical oil transit chokepoints. As Yahoo Finance reported, Australia’s fuel supply chain has come under significant pressure, pushing pump prices to levels not seen in years.

For workers required to drive as part of their job, this is not an abstract geopolitical issue. It translates directly into dollars lost on every shift.

The ACTU’s Case: What Is Being Proposed?

The ACTU, backed by a coalition of unions including the Transport Workers’ Union (TWU), the Australian Nursing and Midwifery Federation (ANMF), the Health Services Union (HSU), the United Workers Union (UWU) and the Shop, Distributive and Allied Employees’ Association (SDA), is seeking an increase of at least 10 cents per kilometre across all 27 affected awards.

As HCAMag reported, the unions argue the current allowance fails to meet its fundamental purpose: ensuring workers are not financially penalised for performing their duties.

The 27 Awards: Who Is Affected?

The application covers a broad cross-section of the Australian workforce. Key awards include:

Nurses Award 2020 (home visit nurses and community health workers)
Aged Care Award 2010 (aged care workers travelling between facilities or to clients’ homes)
Social, Community, Home Care and Disability Services (SCHADS) Award 2010 (disability support workers, community service workers)
Fast Food Industry Award 2010 (delivery drivers)
Building and Construction General On-site Award 2020 (construction workers travelling between sites)
Clerks Private Sector Award 2020
Health Professionals and Support Services Award 2020
Electrical, Electronic and Communications Contracting Award 2020

The full list spans industries from healthcare and social services to construction, retail and hospitality.

The ANMF’s Separate Push for Nurses

One day before the ACTU filed its multi-award application, the Australian Nursing and Midwifery Federation (ANMF) lodged its own separate variation specifically targeting the Nurses Award on 13 April 2026.

The ANMF’s application highlights the particular burden on nurses who provide in-home care in rural and regional areas, where distances are greater and public transport alternatives are limited or non-existent. For these workers, the gap between the allowance and real costs is especially acute.

Real-World Impact: Who Is Paying the Price?

Consider a community nurse in regional Victoria who drives 80 kilometres per shift for home visits. At the current 99c/km rate, she receives $79.20 per shift for vehicle costs. But with fuel prices up 35%, her actual costs now exceed that amount by a meaningful margin. Over a five-day week, the shortfall adds up. Over a year, it represents a significant hit to take-home pay.

The same arithmetic applies to disability support workers in outer suburbs, aged care staff covering multiple facilities, and fast food delivery drivers whose entire role depends on being behind the wheel.

As HR Leader noted, the unions argue this is not a matter of increasing worker benefits. It is about restoring allowances to their intended purpose: genuine cost recovery.

The Employer Perspective

It is worth acknowledging that any increase to vehicle allowances has flow-on cost implications for employers. Industry groups and employer associations have historically raised concerns that blanket allowance increases can disproportionately affect small businesses, particularly in sectors like aged care and community services where margins are already tight and funding comes from government contracts rather than market pricing.

Some employer representatives may argue for targeted adjustments rather than a flat increase across all 27 awards, or for a mechanism that ties allowances to a published fuel price index so rates adjust automatically without repeated FWC applications.

These are legitimate considerations, and the FWC will weigh them alongside the evidence of worker hardship.

Connection to Yesterday’s Road Transport Order

If you followed the FWC’s road transport news yesterday (20 April 2026), you may have seen that the Commission issued its first-ever contractual chain order for fuel cost recovery. That order requires supermarkets, retailers, manufacturers and miners to cover transport operators’ fuel costs from 21 April onward.

That road transport order and this vehicle allowance case are related but separate actions. The road transport order addresses contractor supply chains. This case addresses employee entitlements under modern awards. Together, they represent a significant shift in how Australia’s industrial relations system is responding to the fuel crisis, but they operate through different legal mechanisms and affect different groups of workers.

What Happens Next?

The FWC has listed the matter as a major case. Directions hearings are expected in the coming weeks, with the Commission likely to hear evidence on fuel price data, award coverage and the financial impact on both workers and employers.

Given the urgency framing of the ACTU’s application and the speed at which fuel costs are rising, observers expect the Commission to consider interim measures while the full case proceeds.

What Should You Do?

If your work requires you to use your personal vehicle, now is a good time to:

Check your award. Identify which modern award covers your role and what vehicle allowance rate currently applies.
Track your kilometres. Keep a log of work-related driving. This helps you claim the correct allowance and provides evidence if your employer is not paying the right rate.
Know your entitlements. Your vehicle allowance is a legal entitlement under your modern award, not a discretionary bonus. If your employer is not paying it, that is an underpayment.
Stay informed. Follow the FWC proceedings through the official case page.

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