Fair Work Australia has announced a $17.10 pay rise per week for the country's lowest paid workers, saying it's taking a middle-of-the-road approach after unions lobbied for a $26 increase.

The change will take effect from July 1, when the national minimum wage will come to $606.40 per week.

Both unions and business groups have attacked the decision; with unions saying the rise doesn't go far enough, while business says it is too much.

FWA president Justice Iain Ross said in a statement the increase was "moderate" and could assist living standards for the lowest paid.

"Compensation has already been provided through tax cuts and transfer payments, and further compensation by minimum wage adjustments would amount to double dipping," he said.

He noted over the past decade that earnings had risen faster than actual rates of pay for individuals.

"As a consequence, those reliant on award rates of pay have fallen behind the average earnings of workers and, in this sense, have not retained their relative standard of pay," he said.

He added FWA was not persuaded to take increases to the superannuation guarantee into account.

This article first appeared on SmartCompany.