The Western Australian Government Indexation Policy for the Non-Government Human Services Sector (Indexation Policy) has recently been revised.

The revisions simplify the Indexation Policy, improve the consistency of application of indexation across government agencies, and provide greater certainty for service providers.

The revised Indexation Policy applies to all eligible new and existing service agreements for community services between government agencies and Not-for-profit organisations from 1 July 2016.

The main changes to the Indexation Policy are:

  • Prescribing 1 July each year as the application date of indexation to service agreements;
  • Use of the latest actual price indices published by the Australian Bureau of Statistics, available at 1 July each year;
  • Progressive changes to the current indexation formula using a combination of the Perth Wage Price Index and the Perth Consumer Price Index, from 1 July 2016 to solely reflect the Perth Consumer Price Index from 1 July 2018; and
  • Incorporating definitions within the Delivering Community Services in Partnership (DCSP) Policy to the Indexation Policy.

From July 2016, government agencies will no longer apply an estimated or forecast indexation rate to eligible service agreements. Instead, the latest actual price indices published by the Australian Bureau of Statistics will be used to calculate the applicable indexation payment.

Service providers will receive indexation payments based on an actual indexation rate that requires no adjustment. This change to the Indexation Policy ensures that the calculation and payment of indexation to service providers is consistent across all government agencies.

Indexation will be applied to the service agreement price on 1 July each year. The Indexation Policy does not apply to other funding arrangements including grants under the DCSP Policy; or to contractual arrangements that are not for community services as defined by the DCSP Policy.

A Fact Sheet, Frequently Asked Questions and the revised Indexation Policy, are attached to this Bulletin.  If you would like further information on the Indexation Policy and how it will affect your service agreements, please contact FaCS or your Contract Manager.

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