The Cabinet has agreed to fund a $114 million pay equity settlement for Oranga Tamariki social workers, Children's Minister Tracey Martin said.

The settlement has been agreed to in principal between the Public Service Association (PSA) and Oranga Tamariki.

It is worth $114.6m over five years and applies to more than 1300 social workers.

"I want to acknowledge the efforts of both the Oranga Tamariki and the PSA, who have worked together in good faith to examine the claim and reach agreement," Martin said.


The settlement will see an average lift in their salaries of 30.6 per cent over a two-year period.

Martin said the settlement demonstrates the Government's commitment to pay equity for all women in New Zealand.

"Just a week after we celebrated 125 years of women's suffrage, this decision recognises a historic gender-based undervaluation of Oranga Tamariki social workers, who perform vital work in keeping children and families safe."

The Council of Trade Unions (CTU) President Richard Wagstaff said the offer showed the power of unions to deliver pay equity settlements that significantly advance women's equality in New Zealand.

"A 30 per cent average pay rise is a credit to the PSA, and to these social workers who persisted so long helping Kiwi kids, despite being so underpaid."

He said the CTU estimates more than 63,000 working people have now had a pay equity settlement or offer.

Oranga Tamariki and PSA will jointly present the settlement to those in scope of the claim, at a series of meetings around New Zealand over the two weeks from October 8.

Oranga Tamariki social workers, who are PSA members, will then vote on whether to accept it.