The Federal Government has today announced a $173 million boost to workshops for the intellectually disabled who have been paying workers as little as $1 an hour.

Under pressure after a court action described the wages as discriminatory and the sector that pays them cried poor, the Government's announcement came amid a class action by up to 10,000 workers to claim back pay.

The ABC's 7.30 program has spoken to a number of the workers and their families employed in what are now known as Australian Disability Enterprises (ADEs) but used to be called "sheltered workshops".

Tyson Comrie-Duvall earns $1.79 an hour packing muesli bars and jellybeans. In seven years, he has had just a five cent per hour pay rise.

Besides his intellectual disability, Mr Comrie-Duvall also has autism and ADHD.

He and his mother Claudine, who is also on a disability pension, live a frugal existence.

"We live in this house here and it's a Department of Human Services - so what you see here, that's all we have," Ms Duvall told 7.30.

"And what's going to happen to him in the future after me?" she wondered, adding that Mr Comrie-Duvall's take-home pay is just $137.50 a fortnight.

Maurice Blackburn solicitor Josh Bornstein, who is representing the workers, says Australia can afford to do better.

"We are one of the wealthiest countries in the world," he said.

"We can afford to pay intellectually disabled employees more than a dollar an hour."

'I don't want to be treated any different'

Alysia Maloney was paid $4.85 an hour stuffing laminate tabs into plastic pockets. She quit her job in disgust at the low pay.

"I don't want to be treated any different and I want to be on the same wages as everyone else," Ms Maloney said.

Mr Comrie-Duvall and Ms Maloney's wages were calculated under a system called BSWAT - Business Services Wage Assessment Tool - which assesses an employee's ability to work.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 8 minutes 16 seconds 8 m Intellectually disabled workers paid as little as $1 per hour

Ken Baker, who runs National Disability Services, the peak body in charge of ADEs, says the industry was merely implementing a government decision by paying the low wages.

"It was a tool that was developed by government, owned by government," he said.

"All the employer is doing in those circumstances is implementing the result."

When asked if he had any problem with people working for a dollar an hour, Mr Baker did not answer the specific question but explained that workers could be out of a job if wages were too high.

"I want wages to be fair and I think it's very important that they be determined in a fair way, that accurately reflects a person's range of competencies and skills and their productivity," he said.

"But I don't want people to be excluded from employment or priced out of jobs just because their capacity to work is very restricted."

Pay cut by 75pc 'because she picked up paper without bending knees'

The regular BSWAT assessments, where workers like Ms Maloney were assessed according to their productivity and their competency, produced some bizarre results.

Her lawyer, Kairsty Wilson, says this happened when Ms Maloney was completing a workplace safety assessment.

"She actually answered all of the questions correctly for the occupational health and safety, she was marked 'not yet competent' in that section and I said 'why has she been marked not yet competent here?'" said Ms Wilson, from Association of Employees with Disability Legal Centre.

"And it was because she had been observed in the factory picking up a piece of paper from the floor without bending her knees."

Ms Maloney's pay was cut by 75 per cent.

"We're better than that and why do they treat us like that, and give us so little wage?" she said.

Ms Wilson questions the assumptions behind the tests.

"In our society, we work, we get paid for it. So why is there a difference?" she said.

"It's employment - it's not a babysitting service."

Discrimination issue flying 'under the radar'

In 2012, a landmark Federal Court decision found that workers like Mr Comrie-Duvall and Ms Maloney were being underpaid and discriminated against.

But two years on, they have not received back pay and a new system is yet to be designed.

Mr Bornstein says the issue has been "under the radar" for most of the Australian community.

"They're not aware that intellectually disabled employees are being discriminated against in this way and treated so shabbily by the Federal Government," he said.

"And we're determined to let as many people know about this as possible."

The Federal Government has hit back, introducing legislation that would give disabled workers half the back pay they are owed, but only if they abandon the court case.

The Government argues the disabled workers are better off accepting its deal now than waiting for the case to be decided.

The lawyers ask why the workers should only accept half of the money they are legally owed.

Fears of job losses if businesses forced to pay more

A Senate Committee has been scrutinising the Government's offer.

David Barbagallo, who runs 230 not-for-profit disability enterprises around the country, told the Senate committee that if businesses like his were forced to pay higher wages, many of them would close.

When asked in the committee how many people would lose their jobs if the wages went up substantially, he said "90 per cent".

That worries Matthew Hillas' mum, Vicki Smith.

Matthew Hillas gets $4.50 an hour and his earnings mean his disability pension is docked. ( ABC TV )

Mr Hillas struggled when he tried to hold down a mainstream job, but after six years at a disability enterprise, he has his forklift licence and is learning to drive a truck.

"So his confidence is sky-high - his self-esteem is incredible from where it was before we came into an ADE," Ms Smith said.

"And every day is a joy for him to go to work."

Mr Hillas loves his job but he gets $4.50 an hour and his earnings mean his disability pension is docked.

Mr Bornstein agrees that there is an enormous amount of research showing that people work not just for money.

"But, at the same time, getting paid a proper wage is recognition of someone's worth and is important to their sense of wellbeing and dignity in the workplace," he said.

"There is no excuse in this country for paying anyone a dollar an hour."

The Senate Committee's report is due on Tuesday but today Assistant Social Services Minister, Mitch Fifield, got in early and announced a $173 million payment to help bolster wages for disabled workers in ADEs in the future.

But that does not settle the back pay issue, so for now, the class action will continue.