The Conversation
THOUSANDS of Australians with disability can legally be paid as little as $3.31 an hour under Australia’s supported employment system, with researchers arguing the decades-old model no longer reflects expectations of inclusion, fairness or opportunity.
A new report from the Grattan Institute is calling for sweeping reforms to disability employment, including a phased end to sub-minimum wages and stronger pathways into mainstream jobs.
Currently, people employed through Australian Disability Enterprises (ADEs) – formerly known as sheltered workshops – can be paid below the minimum wage under the Supported Employment Services Award.
For some workers, wages can fall even further under the Supported Wage System, where pay is reduced according to assessed productivity. In some cases, that means earning as little as $3.31 an hour, compared with Australia’s national minimum wage of $26.44 an hour.
Around 17,000 Australians with significant disability work in disability enterprises, undertaking jobs such as packaging, manufacturing, cleaning, gardening, laundry and recycling.
While many workers and their families value the routine, friendships and support these workplaces provide, the Grattan Institute says the current model offers too few opportunities to transition into open employment.
For Australians supported by the National Disability Insurance Scheme (NDIS), mainstream employment remains uncommon.
Only 12 per cent of adults with an intellectual disability who participate in the workforce are employed in mainstream jobs on full award wages. For people with Down syndrome, that figure falls to just seven per cent.
The report also found disability enterprises rarely act as a pathway into open employment.
In 2022, only four per cent of workers under 25 moved from a disability enterprise into another job within a year.
Among workers aged 25 and over, the transition rate dropped to just two per cent.
Rather than simply closing disability enterprises, the report recommends first building stronger alternatives through tailored employment services, long-term workplace support and greater incentives for businesses to employ people with disability.
The institute is also calling for disability-focused employers to evolve into inclusive social enterprises that provide award wages, career development and genuine opportunities for progression.
Importantly, the report argues sub-minimum wages should eventually be phased out – but only once better employment pathways are in place.
Researchers warn removing existing disability enterprises without creating viable alternatives could leave many people without work, routine or social connection.
Instead, they recommend a staged approach, including a review of the Supported Employment Services Award and Supported Wage System within the next decade.
The report concludes that while the current system has provided employment opportunities for many Australians with disability, it now risks limiting choice, perpetuating segregation and allowing wages that most Australians would consider unacceptable.
