A scheme which results in some disabled workers being paid as little as 89 cents an hour is set to be scrapped.

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1 NEWS can reveal the Government is proposing a new plan to ensure all disabled workers are paid at least the minimum wage.

There are about 900 disabled Kiwis who turn up to work every day but don't get paid the minimum wage - more than 600 of them earn less than $5 an hour.

Disabilities Issues Minister Carmel Sepuloni says the minimum wage exemption for disabled New Zealanders has to go.

"We've been accused internationally of basically practising in a discriminatory way - our own disabled community here have said that it discriminates," Ms Sepuloni told 1 NEWS.

"It is unfair and we've got a really good reputation as being a progressive, inclusive fair country that doesn't discriminate so we want to make sure that we're not operating in a way that we do."

The Government is looking at introducing a wage subsidy, paid to the employers of disabled workers, to top them up to the minimum wage.

The IHC's advocacy director, Trish Grant, says the minimum wage exemption has allowed for "very poor practice and very adverse circumstances for very vulnerable people".

"There are many examples where people are working long hours for very little money, so that's neither fair nor right," she said.

But Peter Fraher, the managing director of Abilities Incorporated, which employs 120 disabled workers, said he doesn't believe the minimum wage exemption is discriminatory.

"We don't see it that way - we see it as helping them to lead a normal life and work with their mates and get some self-esteem."

Mr Fraher says he'd seen previous Government reforms in the sector result in disabled workers losing their jobs and he doesn't want to see that happen again.

Disabled workers are also currently entitled to welfare assistance, which could be reduced or cut once they begin being paid the minimum wage.

Ms Sepuloni says the Government will consult with the sector over the next several months to try to develop a system where "the workers are not disadvantaged in any way. In fact, we want to make sure that they're better off".

Mr Fraher said if the Government could guarantee this, he and his workers would be "very happy, very happy".

The National Party disabilities issues spokesperson, Shane Reti, says the Government will have to tread carefully.

"A number of these people are getting disabled allowance, they're getting invalids benefit and this could be a very complex system - so we need to see the detail.

"We're supportive of getting disabled people into work, and however we can help we will," Dr Reti told 1 NEWS.