Watch: Cabinet agrees to $2 billion pay equity package for 'dedicated' low-paid care workers

A 'historic' settlement has been reached by cabinet today, aiming to increase wages of some of New Zealand's lowest paid workers in an industry dominated by women.

Political reporter Andrea Vance has the latest on the settlement that would give low-paid care workers big wage increases. Source: 1 NEWS

Prime Minister Bill English revealed details on the pay equity settlement today and said the government had agreed "in principle" to settle the care and support pay equity case.

"Cabinet today agreed to a $2 billion pay equity package to be delivered over the next five years to 55,000 care and support workers employed across the aged and residential care sector."

He said the settlement was the result of "complex and detailed" negotiations over the last 20 months.

The package will affect 55,000 care and support workers over the next five years. Source: 1 NEWS

"It will deliver a significant pay boost for some of the country's most dedicated and hard-working but lowest paid workers."

Health Minister Jonathan Coleman described the settlement as a "historic $2 billion equity settlement".

There are about 55,000 care and support workers across the aged care, home care and support and community residential sectors.

"The work force is made up of mostly female employees, with half of them working part time," Dr Coleman said.