Around 5000 mental health and addiction support workers will get a pay rise after the Government extended pay equity for care and support workers to include them.
Nearly half of the workers would get an increase of more than $3 an hour and another 1000 would get a more than $5 per hour increase, Health Minister David Clark said today.
The new pay rates would be backdated to July last year.
Meetings will be held around the country so workers can vote on ratifying the settlement.
The Government agreed to extend the Care and Support Workers (Pay Equity) Settlement Act to include mental health and addiction support workers after a claim was lodged by the Public Service Association and E tū unions with the Employment Relations Authority.
That law increased the pay rates of 55,000 care and support workers in aged and disability residential care, and home and community support services.
It was the case of rest home worker Kristine Bartlett that was the catalyst for the previous National government's $2 billion pay equity settlement.
"This agreement puts right a problem created by the previous government which deliberately excluded mental health and addiction workers from the Care and Support Workers settlement," Clark said in a statement.
"Ensuring our mental health and addiction workers are paid what they deserve will help deliver a robust workforce," Clark said.
The $173.5 million settlement extension will be implemented over a five-year term and funded through an increase to the health budget.
"Our members in mental health and addiction support were unfairly left out of the original settlement," PSA assistant national secretary Kerry Davies said.
"The mental health and addiction support sector urgently needs more staff, and this should help to recruit and retain skilled and dedicated workers, she said.
E tū equal pay co-ordinator Yvette Taylor said the deal would be a relief, and a recognition of the work mental health and addiction support workers did.
"We would urge everyone to attend to hear about and vote on this historic offer," Taylor and Davies said in a statement.
Council of Trade Unions president Richard Wagstaff said mental health and addiction support workers had been undervalued in the same way as care and support workers were.
"This deal not only makes it fair, it helps prevent a looming crisis in the broader sector, with people switching to aged care for better pay.
"I'm particularly pleased to see that the offer is backdated to when these people would have been receiving the money they deserved if the National government had not wrongly left them out of the care and support settlement last year," he said in a statement.