From 1 July 2019, the indexation rate for service agreements is based on a 20% weighting of the Perth Consumer Price Index (CPI) plus an 80% weighting of the Western Australian Wage Price Index (WPI). The 2024-25 indexation rate is 4.81%. The price index used is the latest available actual data for the Perth CPI and Western Australian WPI as published by the Australian Bureau of Statistics. The indexation rate includes a 0.5 per cent increase to the Wage Price Index (WPI) component of the indexation calculation, which is intended in part, to assist community services providers to transition to higher legislated Superannuation Guarantee rates.
The objectives of the Indexation Policy are to provide:
- increases to service agreement prices over the life of a service agreement to assist in addressing cost increases
- transparency and consistency in the level of indexation across community services service agreements
- administrative simplicity in the application of the Policy
- consistency of the rate of indexation with the public sector wages policy and commercial contracting practice
Applying indexation to service agreements
Show more- Service providers are not required to apply for indexation – it applies to pricing for eligible service agreements without being requested.
- ºÚÁÏÕýÄÜÁ¿ agencies must apply indexation to eligible service agreements in a timely fashion to support organisational sustainability in line with the DCSP Policy.
- Indexation is cumulative, meaning that payments on a service agreement include all of the indexation applied to date.
- Where service agreements are part-funded by the Commonwealth ºÚÁÏÕýÄÜÁ¿, the Indexation Policy applies to the State ºÚÁÏÕýÄÜÁ¿ funded component of these service agreements.
- Where service agreements have pricing frameworks designed to facilitate individualised funding agreements, the Indexation Policy applies to the unit prices or similar pricing mechanisms.
- The Indexation Policy does not apply to grant agreements or arrangements not for community services as defined by the DCSP Policy.
Practice example
The table below outlines a practice example for applying indexation according to the Indexation Policy.
- Service Agreement Commencement Date - 1 April 2024
- Five-year term
- Quarterly Payment Schedule
| Year | Time Period | Quarterly Payment Schedule | Applicable Indexation Rate |
| YEAR 1 | 1 April 2024 – 31 March 2025 | April – June 2024 | No indexation applies Price is fixed for the first year of the service agreement. |
| July – September 2024 | |||
| October – December 2024 | |||
| January – March 2025 | |||
| YEAR 2 | 1 April 2025 – 31 March 2026 | April – June 2025 | Apply 2024-25 indexation rate |
| July – September 2025 | Apply 2025-26 indexation rate | ||
| October – December 2025 | |||
| January – March 2026 | |||
| YEAR 3 | 1 April 2026 – 31 March 2027 | April – June 2026 | |
| July – September 2026 | Apply 2026-27 indexation rate | ||
| October – December 2026 | |||
| January – March 2027 | |||
| YEAR 4 | 1 April 2027 – 31 March 2028 | April – June 2027 | |
| July – September 2027 | Apply 2027-28 indexation rate | ||
| October – December 2027 | |||
| January – March 2028 | |||
| YEAR 5 | 1 April 2028 – 31 March 2029 | April – June 2028 | |
| July – September 2028 | Apply 2028-29 indexation rate | ||
| October – December 2028 | |||
| January – March 2029 |
