The caregiver who led the battle to increase the pay of care and support workers hopes her win will help lift people out of poverty.
The government announced the $2 billion settlement as a response to Kristine Bartlett's court case,which successfully argued that her low hourly pay rate was a result of gender discrimination.
Kristine Bartlett worked in the industry for 25 years, and was being paid just above the minimum wage at $16 an hour.
But from July, that will now jump to $20, and eventually $23 by 2021.
Ms Bartlett said she was she was sick and tired of watching her colleagues struggle with little money.
"I've seen them come to work sick, they haven't been able to afford to go to doctors, I've seen them walk in the rain, I've seen them come without lunch, and that's what breaks my heart.
"So this will be a life changer."
Helen Amy, a home support worker, has had to work four jobs to make ends meet and support her family.
This was a victory for all working women, she said.
"It shows what we can do when we stand together for a better working life. It shows what we can achieve when we join a union, and it shows what we can achieve when our unions work together with business and government."
Around 55,000 would get a pay-rise as a result of this settlement.
Nurse Dilani Pereta said hopefully that would reduce the staff turnover rate significantly.
"For all people it's so important to have the same carers that they know, who are happy and smiling with them everyday."
Health Minister Jonathan Coleman signalled that as a result of the settlement, there could be an increase to ACC levies or possibly in costs across the sector.
From 1 July, the predominantly female workforce will receive a pay rise of about 15 to 49 percent, depending on qualifications and experience.
Need to address wage bargaining laws - Labour
Labour leader Andrew Little said the systemic issues that allowed people to be working for a $15.75 minimum wage in the first place needed to be addressed.
He was surprised by the National government giving such a good deal to care workers.
"I've never known the National Party or the National government to be so cock-a-hoop about centralised wage bargaining.
"That was legal action that saw the government sending in lawyers to oppose it basically every step of the way, then the court said either you sort it out and fix it or we'll have to make some decisions and impose it on you."
The rules about collective bargaining needed to be looked at, Mr Little said.
"I'm saying we need to look at not just these workers but for a bunch of other workers now, we have incomes that are just way below a fair reward for the work that is being done.
"The laws that this government has passed that allows employers to walk away from collective bargaining - that's got to be stopped."
He said a Labour government would raise the minimum wage, but would not be pressed on a figure nor say if increases would be higher than the roughly 50 cents a year the National government had implemented.
