BREAKING: Millions of Aussies to get $1,123 pay rise

Australia's 2.2 million workers living off the minimum wage will be $21.60 a week - or $1,123 a year - better off, after the Fair Work Commission announced a three per cent pay rise on Thursday.

This will take the national minimum weekly wage to $740.80.

The rise is significantly less than the six per cent the peak union body, the ACTU, was calling for, which would have worked out to an additional $43.15 per week.

BREAKING: Millions of Aussies to get $1,123 pay rise

The commission’s chairman, Iain Ross, said the Australian economy had performed moderately well in what is considered a strong labour market.

But changes in the economic environment, including a recent fall in GDP growth, a drop in inflation and the government’s changes to income tax, had already delivered a benefit to low-paid households.

These factors played a part in the decision to grant a minimum wage pay rise lower than last year's 3.5 per cent rise, Ross said.

ACTU president Michele O'Neil had told the commission a six per cent rise was within a band of increases that would not constitute a threat to economic growth.

On Thursday, the ACTU's assistant secretary, Liam O’Brien, said the rise was a "step in the right direction".

But he said it would still leave the minimum wage more than seven per cent short of the living wage target, which is 60 per cent of the median full-time wage.

“We have a long way to go to ensure that the minimum wage is enough for workers to live on and support their families," O'Brien said.

“No one in Australia should be living in poverty while working full time, but we know that thousands of people are facing this reality."

The Australian Industry Group was calling for a rise of two per cent or about $14.40 a week, while the Australian Chamber of Commerce and Industry asked that the increase not exceed 1.8 per cent.

The pay rise will take effect from the first pay day after July 1.

This story first appeared on 7News.com.au - click here for more.

Amy Sinclair

Amy Sinclair is a contibutor for New Idea Food.

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