Social workers at Oranga Tamariki will get a 30.6 percent pay increase over two years in an equal pay settlement affecting 1300 employees.
Cabinet has agreed to fund the agreement in principal between Oranga Tamariki and the Public Service Association (PSA), the union representing the social workers.
The PSA will now vote on whether to accept the offer.
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The settlement is worth $114.6 million over five years.
Minister for Children Tracey Martin says it's a demonstration of the "Government's commitment to pay equity for all women".
"That is how undervalued women-dominated professions have been in this country," Ms Martin said on Tuesday morning.
The Oranga Tamariki/PSA working group looking into pay equity concluded the role of a social worker in Oranga Tamariki has been subject to historical and ongoing gender-based undervaluation.
The PSA says the settlement will have a knock-on effect for social workers in other sectors.
"For social workers at DHBs and NGOs who deliver vital community public services it is a given that discussions about pay equity will be entered into - with strong, continuing advocacy for pay equity from the PSA on their behalf," Erin Polaczuk, PSA National Secretary said.
The Council of Trade Unions says the pay rise is a credit to the PSA and to social workers who helped kids for so long despite their pay.
"The settlement offer shows the value of union membership to rapidly advance women's rights and economic equality in New Zealand. It will absolutely make a huge difference to the quality of our social workers' lives," CTU President Richard Wagstaff said.