Paid work can be a pathway to independence, purpose, and connection — but Australians with disability are far less likely to be employed than everyone else, especially those with high support needs. Many who do work are paid well below the minimum wage, some as little as $3.31 an hour.
How do we build a system for disabled workers that opens up better jobs and fairer wages?
In this podcast, Grattan Associate Ben Jefferson talks to Grattan Disability Program Director Sam Bennett and Senior Associate Owain Emslie about our report, Opening doors: Better jobs and fairer wages for disabled workers, which sets out a pragmatic path to better employment opportunities for disabled people with high support needs — while ensuring no one is left behind.
Transcript
Ben Jefferson: Paid work can be a pathway to social and economic integration, independence, and personal fulfilment. Work fosters a sense of purpose, opportunities for personal development, and meaningful social connections within the broader community. This is true for everyone, but it’s particularly true for disabled people.
For people living with disability, employment has been shown to contribute to a positive sense of identity and self-worth, and to improved health and wellbeing. But Australians with disability are far less likely to be employed than non-disabled Australians, and this is especially true for people with high support needs.
When these Australians are in work, many are paid under the supported wage system, which permits pay rates well below the national minimum wage — as low as $3.31 per hour. Too many disabled Australians with high needs remain excluded from the workforce altogether, diverted into day programs that substitute for work, or confined to sheltered work at low pay with little prospect of progression.
Grattan’s latest report, Opening doors: Better jobs and fairer wages for disabled workers, sets out a pragmatic pathway to reforms that can deliver better results for disabled people with high support needs, while ensuring no one is left behind.
Welcome to The Grattan Podcast. This podcast is being produced on the lands of the Wurundjeri people. Grattan acknowledges and celebrates the First Nations people on whose traditional lands we meet and work, and whose cultures are among the oldest in human history.
I’m Ben Jefferson, associate at Grattan Institute, and I’m here today with Sam Bennett, program director of Grattan’s Disability Program, and Owain Emslie, senior associate at Grattan. They’re both co-authors on Grattan’s new report, Opening doors. Sam, Owain, welcome to the podcast.
Owain Emslie: Thanks, Ben.
Sam Bennett: Thanks, Ben.
Ben Jefferson: Before we start, I want to acknowledge that each of us comes to these issues with different experiences of disability. Many of us have lived experience, or are familiar with the experiences of family and friends when we talk about these things. Discussions about reform here are never abstract for us. They’re about real people and the support systems in their lives. So the goal in this conversation, and in this report, is to offer practical, evidence-based solutions that will create better employment outcomes for disabled people with high support needs.
This is the first in a series of reports that Grattan’s Disability Program will be producing about employment, and this first report, Opening doors, focuses on supported employment. Some of our listeners might not be familiar with that term. Owain, to start with, can you explain what supported employment is?
Owain Emslie: Yeah, thanks, Ben. There are a few definitional points to get across in this space. Supported employment refers to jobs where disabled employees receive additional help in the workplace to undertake their work. In Australia, that’s normally through the NDIS, and it occurs most commonly in disabled-only workplaces called Disability Enterprises, or ADEs. About 80 per cent of supported employees are in ADEs.
But people can also access those same employment supports in open employment — employment where disabled and non-disabled people work side by side, the mainstream employment you’d be familiar with. About 20 per cent of people in supported employment are accessing those supports in open employment.
It’s not all disabled people. It’s typically people with high support needs. People with Down syndrome and intellectual disability are the most likely to be in supported employment if they’re working, and there’s also a significant cohort with psychosocial disability or autism. The report also considers people with high support needs who aren’t currently working — they’re part of the cohort we’re looking to improve employment outcomes for as well.
Ben Jefferson: Thanks, Owain. Sam, considering this is the first of a series of reports you’re planning to publish, why was supported employment chosen as the area to dive into first?
Sam Bennett: Thanks, Ben. This is an area that’s been pretty impervious to reform, for as long as you care to look. But I do think we’re on the cusp of an opportunity for real change in Australia, and that’s why we’ve chosen to start here.
One of the long-standing reasons for that inertia is the very entrenched views that exist, either in favour of or against sheltered workplaces — the ADEs Owain referred to. Those entrenched positions are frequently well-intentioned, but they’ve had the effect of stifling the possibility of real reform, and they’ve fed into a pervasive idea that we’re somehow stuck where we are.
Historically, it’s hard to think of a sector that’s had as many rebrandings as this one. We started with sheltered workshops, then business services, then ADEs, and now many are disability social enterprises — without the outcome really shifting. We still have very low numbers of people with higher support needs in award-wage jobs in mainstream settings. We’ve got too many people who could be in the labour force sitting in day programs that substitute for work. And we still have a proliferation of disability-only workplaces that pay very low wages and frequently reflect last century’s work practices and expectations of what work disabled people can actually do.
But it’s not all doom and gloom. There was a 4 per cent increase in the proportion of people on the NDIS working in open employment at full wages between 2022 and 2025, and there are various sector-led and philanthropically led initiatives testing new ways to deliver supported employment, which we think show a lot of promise.
Government has also been grappling with major reforms in disability employment. The previous Disability Employment Services program was replaced last year with Inclusive Employment Australia, and as part of that there was an expansion of eligibility to people with lower assessed work capacity — which we think is a good thing for people with higher needs. There was also funding for the establishment of the Centre for Inclusive Employment in the 2024–25 federal budget, and we think that will play an important role in building the evidence base around what works, which is sorely needed.
And then, most importantly in the context of our report, government has committed — long overdue, arguably, given the Disability Royal Commission’s recommendations — to delivering a vision and a roadmap for supported employment reform before the end of the current calendar year.
So we’ve got positive momentum and a policy window. We’re hoping our report can encourage government to be appropriately ambitious about that vision, but also pragmatic about what needs to be done to deliver it. The proposals in our report are really trying to tread that line.
Ben Jefferson: That sounds like a great overview of where the space is at before we dive deeper into the recommendations and analysis. One thing that listeners and readers probably reacted strongly to — and which was certainly eye-opening for me — is finding out that disabled people can legally be paid well below minimum wage. In fact, they’re the only group of people in Australia, apart from prisoners, who can be paid below the minimum wage indefinitely. Owain, why is this the case, and how is it legal?
Owain Emslie: There are actually two mechanisms at play. One is the Supported Employment Services Award, which is the award workers in ADEs are typically on. It’s only available to ADEs, and it has two pay grades below minimum wage. The national minimum wage is currently $26.44 per hour. The Supported Employment Services Award includes Grade B jobs at $16.65 an hour, and Grade A at $8.32 an hour — so Grade B is about two-thirds of the national minimum wage, and Grade A is about a third.
The other mechanism is the supported wage system, which again only applies to disabled people and can include a productivity adjustment. People’s productivity is assessed and they get a rating as a proportion of what a non-disabled person’s productivity would be. So it might be assessed that someone can do the job, but it takes twice as long as a non-disabled person, for example. They’d be assessed at 50 per cent productivity, and that proportion is applied to their wage. There’s a floor — in the current year, $3.31 is the lowest a wage can get to. With the combination of those two mechanisms, you can end up with some very low wages.
Ben Jefferson: So your productivity is rated as half what a fully able person would do — but even before you start, you’re on a lower award wage that sits below the minimum wage to begin with?
Owain Emslie: Yeah. A lot of disabled people working in ADEs would be on those grades, and that award only applies to disabled people in ADEs. Non-disabled people doing the same kind of work could not legally be paid a wage that low. They’d be on an award that’s at least the national minimum wage.
Ben Jefferson: That feels like a really important point, and maybe something a lot of Australians don’t know. But the report isn’t just about wages. It also talks about a lot of the other ways the supported employment system isn’t doing everything it could for disabled people. Owain, what has your research told us about how that system is working to get disabled people into the open workplace?
Owain Emslie: There are a few ways the supported employment system isn’t doing all it could. One is that mainstream employment isn’t always treated as a viable pathway for everyone. When we get to our recommendations later, that’s one of the things we’ll talk about — open employment should be seen as the first-best option for everyone, regardless of their level of need.
The system doesn’t really incentivise providers to encourage people to aspire to open employment, and ADE employment is often presented as the best option people can hope for. An ADE is essentially a segregated setting, which is somewhat out of step with contemporary expectations for inclusion. We expect people to be included in the community, and that’s not really what’s happening if they’re working in segregated settings. The Disability Royal Commission found that those settings are not always safe — the risk of abuse, neglect, and exploitation was higher than in other workplaces.
Ben Jefferson: So open employment might actually be safer for some disabled people than those segregated settings. The image some people have of sheltered work is that it’s a safer environment for people with disability, but what you’re saying is that in those environments, a lot of people are experiencing difficult situations.
Owain Emslie: That’s right. I don’t want to say that all ADEs are bad, or that everyone will have a bad experience there. One of the things we found is that some disabled people and their families do find it a safe environment, and they value the structure and the friendships.
But ADEs often don’t offer a lot of development or career progression. There aren’t many people moving from ADEs to open employment, and there isn’t much career progression within ADEs either. Those are the kinds of opportunities we all expect from our work, and they’re often denied to people working in those settings. Again, we’re not talking about tearing down the whole system. It has some positives — but there are things that can work better.
Ben Jefferson: This might be new to people who don’t know much about what these organisations look like. What would development and career progression look like for people in these organisations, or in open employment? Would it be different from what people without disability experience in open employment, or is it effectively the same thing, with the difficulty being that the segregated model just isn’t delivering it?
Owain Emslie: I think disabled people want the same things from a workplace that non-disabled people do. It’s often the case in ADEs that there are no real opportunities for progression. One of the things we’d hope to see is people moving from ADEs into open employment — that ADEs are preparing them to go on to other things. But that doesn’t happen very much at all. In fact, people leaving an ADE are more likely to be leaving the workforce entirely than moving into open employment.
Sam will probably talk more about raising the bar for the disability social enterprise model. One aspect of that is a more commercially sustainable model. For a lot of ADEs, it’s the employment supports income that’s cross-subsidising the trade — the trade they engage in isn’t commercially viable, and they’re not actually making money on the goods and services they produce. So one of the things a sustainable disability social enterprise should be doing is at least breaking even on trade, so it can support its social purpose as well.
Ben Jefferson: We’ll get into that detail with Sam later in the podcast. From that, Owain, it sounds like open employment will generally be the first-best option for most people. Sam, if ADEs aren’t quite getting people out into open employment, what services do exist to help disabled people into it?
Sam Bennett: One of the things we found in our research is that the employment supports that exist in Australia are pretty fragmented. They sit across two main programs. One is Inclusive Employment Australia — IEA — government’s flagship disability employment program, recently relaunched, as I mentioned. The other is the NDIS. Improving economic participation for disabled Australians has always been one of the objectives of the NDIS from the outset.
But those two services aren’t well joined up at all at the moment, and they work very differently, which makes it harder. The NDIS puts funding into individual plans, and that can support someone’s goal of getting a job — one of many things the NDIS can fund. That might mean capacity-building supports to help someone’s work readiness, for example. But the majority of NDIS funding earmarked for employment funds the day-to-day assistance that disabled people with higher needs require to participate in the workplace — personal support, or assistance to carry out work tasks on the job. And most of that currently goes to the ADEs we’ve been talking about, rather than to assisting people in open employment.
We’d see some big problems with the way the NDIS operates on employment. This is an area where the individualised funding model the scheme relies on hasn’t really afforded government sufficient leverage to shape the quality or efficacy of the employment supports people can access. There’s plenty of indication that NDIS employment supports don’t consistently follow best practice. For example, when it comes to supports that help young people transition from school to work — a really important point in their lives for their employment outcomes — the NDIS has tended to rely heavily on a “train and place” model, when we know you need to flip that on its head. A “place and then train on the job” model works far better for this group.
Then you’ve got IEA, formerly DES. Its main function is getting people into and sustaining work. That’s a commissioned service, so it doesn’t work like the NDIS — it has contracted providers who receive service fees and outcome payments when they support someone into or in employment.
There’s some crossover between these programs, but it isn’t well coordinated, particularly for the group we’re talking about — people with higher support needs. They’ve not traditionally been in the purview of DES, and they don’t tend to fare particularly well under the fairly general employment service IEA provides. The expansion of eligibility I referred to earlier is welcome, but it remains a pretty generalised service. It can work well for people who are either job-ready or just need a little help, but it lacks a dedicated pathway, or the level of specialisation among providers, that’s really needed for people furthest from the labour market.
And then you’ve got JobAccess, which has no direct accountability for employment rates but can provide funding for workplace adjustments and advice to employers and disabled people. So there are a lot of supports, but the problem is there’s really no clear accountability across all of that, or the right configuration of supports to shift the dial on employment results for people with higher levels of need.
Ben Jefferson: So there’s a lot going on, but it’s a bit of a patchwork, and you couldn’t point to any one of them and say the difficulty in getting people into employment is that organisation’s responsibility.
Sam Bennett: Yeah — who’s on the hook? There are so many overlapping services that people can fall between the gaps, and we’re not seeing the kinds of results you’d really want to see.
Ben Jefferson: So the system could definitely work better to get the best employment outcomes for disabled people. But you mentioned that reform has historically been quite difficult here. What are the recommendations you’re making in this report that could improve the system?
Sam Bennett: Owain touched on this earlier. We’ve got a multi-pronged approach with four main focus areas. The first, and really the main thrust of the whole argument, is that we need a concerted shift towards seeing open employment as the primary goal for disabled Australians, regardless of needs.
Up until now, the separate policy treatment of open employment on one hand and supported employment on the other — codified in legislation going back a number of decades — just doesn’t reflect contemporary expectations, or the realities of the work opportunities that are available and possible for people with significant support needs. We argue that with a combination of reforms that improve pathways into employment, support employers to take more people on, and evolve some of those existing employment services, we can really open up opportunities. By doing that, we can see many more disabled people with high support needs in award-wage jobs in the open market.
I mentioned how intractable this has been over a long time. But we took a lot of confidence from the international experience — other parts of the world grappling with many of the same issues. It’s a pretty rare thing, possibly unique, for Grattan to look to the United States for public policy cues. But on this issue there was good reason to, not because the US experience has been a homogenous picture of success, but because if you look at the states that have done best versus those that have done less well, you get a real sense of the factors that have influenced those outcomes.
The places that have really focused on opening up new opportunities and promoting open employment as the first-best option — rather than focusing on getting rid of existing workplaces that don’t match contemporary expectations — are the ones that have delivered the most meaningful change. Places like Vermont, Washington, and Oregon, to name a few, where you’ve seen really promising results in increasing open employment rates and raising wages over a number of years.
In terms of how Australia prioritises open employment, our main recommendation is to extend the Inclusive Employment Australia program to include a specific stream focused on getting people with high support needs into open employment. That stream would need to work quite differently to the rest of the program. It would be much more intensive, the incentives would need to be different, and it would need to follow the evidence for what really works.
We’ve recommended the Centre for Inclusive Employment be tasked with defining what best-practice employment support for disabled people with high support needs should look like, and that government then invest in training and support to enable providers to meet that standard. We identify a portion of NDIS employment assistance funding that we think should be repurposed to support the establishment of this new stream. And we want these services actively offered to people still in school and approaching a transition to work, people in NDIS day programs, and existing employees in ADEs.
We think the NDIS should continue to provide really important capacity-building supports, and ongoing support to supported employees once they’re in a job. But the onus for shifting the dial on employment results for this group should be clearly and firmly located with IEA.
Ben Jefferson: It was really interesting reading the case studies you dug up, particularly on a couple of US states. The classic economic mindset would say that if you try to raise the wage floor at the same time as increasing employment, it’s just not going to be possible. But the experience of some of those states proved it was — largely, I think, as a function of leadership and direction, and the concerted use of evidence-based policy rather than throwing things at the wall to see what sticks.
So the first piece of the puzzle sounds like improved employment services to help disabled people with high support needs into open employment — which isn’t just the gold standard, it should be the baseline expectation. The next piece seems to be going to employers, and, like in the case of Vermont, trying to increase demand. Owain, what does the report say about expanding the opportunities for those kinds of roles in open employment?
Owain Emslie: You’re right, Ben. A lot of mainstream employers aren’t employing disabled people in great numbers, and there are barriers to that happening. One is a lack of knowledge — employers often don’t know how to make the workplace adjustments that can really help disabled people thrive, and they assume disabled people can’t do the work they need done. In that, employers are no different to the population at large.
There are supports for employers now, and we can keep making them aware of things like the free advice from JobAccess on workplace adjustments and inclusive hiring, and the funding available for workplace adjustments. But as well as awareness-raising, we really need structural changes and incentives. Governments can engage directly with large employers who have the capacity to employ significant numbers of people, offering tailored, long-term assistance to make that happen.
Another recommendation is requiring large employers to report publicly on the number of disabled employees they have, the number of referrals they’re getting from the new IEA stream, and the number of their workforce receiving subminimum wages. We’ve seen with the gender pay gap reporting the WGEA conducts that this sort of transparency makes a real difference, and we think it can have an impact for disabled employees too.
Government can also lead as a very large employer — setting standards through targets, reporting, and pathways for disabled people in its own workplaces. And it can do a lot with procurement policies, which can be a really powerful lever. At a minimum, we’re recommending requiring suppliers bidding for major contracts to demonstrate accessible recruitment practices, timely provision of workplace adjustments, and participation in disability employment reporting.
If governments want to be more ambitious, they could require firms bidding for big contracts to make specific, time-bound commitments for hiring disabled employees, and assess that competitively as part of the tender process. That’s something the Commonwealth Government could do — and it’s something the states, and even local government, can do more of.
Ben Jefferson: So with these reforms, there’d be improved opportunities for disabled people with high support needs going into open employment. But there are a lot of organisations currently doing good work providing ADE environments and employment for people with high support needs. Under these reforms, Sam, would there still be a role for specialist disability employers?
Sam Bennett: Yeah. Choice of employment remains really important, and there could actually be an expanded role for specialist disability employers in the future. But the bar at the moment is set too low, in terms of both workers’ expectations of those jobs and government’s objectives.
So government really needs to define what it thinks the characteristics of a disability-focused social enterprise are, and set new certification standards that raise the bar for what good specialist disability employment in Australia looks like. We provide a framework for that in the report. We think about fairer wages in that context, about more open and inclusive workplaces, and about workers having more autonomy and progression opportunities — but also about the commercial sustainability of the enterprise. Being commercially viable businesses is one of the best ways specialist disability employers can actually deliver on their social purpose. It enables a number of those other important things to happen, not least the higher wages we want to see.
We talk about the need for both financial and practical support to be made available to providers — whether new ones establishing, or existing ones transitioning to become a certified disability social enterprise. There is a current sector transition fund, but in our view it’s been insufficient in quantum, and not well enough targeted to the kinds of changes we want to see. Again, we want to see government procurement leveraged here, and targets set to create attractive market incentives. At the moment, that just doesn’t happen.
In our vision, traditional ADEs that don’t seek to transition to government’s preferred model for a specialist disability employer could continue to operate. But we’d expect to see — as we have in other jurisdictions — their dominance wane over time, as more people simply opt for the alternatives in increasing numbers.
Ben Jefferson: Coming back to the subminimum wages in these specialist disability roles — you fairly identify in the report that having both a productivity adjustment and a subminimum award wage is manifestly unfair. What’s the plan to transition away from subminimum wages, and how quickly could or should that happen?
Owain Emslie: Firstly, we’re not recommending abolishing subminimum wages overnight. On principle, it’d be great to say that, as of tomorrow, disabled people are paid under the same rules as everyone else. But in the short term, there are well-founded concerns that could lead to a lot of job losses, and we don’t want to make recommendations that leave some people worse off or leave people behind.
We are optimistic, though, that the changes we’re recommending would make it evident over time that there’s less need for those mechanisms than there is now. If you can deliver better employment services, increased opportunities in mainstream employment, and raise the bar for disability social enterprises, we expect opportunities and wages to increase for disabled people.
Another point is that all our recommendations have been costed. While there’s an upfront cost to government of about $1.1 billion over the four years of the forward estimates, we expect these changes would be revenue-positive within a decade, for a few reasons. One is getting people into work, and into better-paying jobs — they’re earning more, which lowers the benefits governments pay out. So we expect savings on the disability support pension, for example. When people earn more, they also pay income tax, which is a net positive to the government’s fiscal position.
The supports people receive while in employment are another factor. We do expect people to continue receiving job coaching and other supports, but those may be less intensive than what they currently get in supported employment or day services, so we expect savings there too. And as Sam mentioned, the new IEA program would be partially funded by money currently spent on similar functions in the NDIS, so we can repurpose some of that.
The effect of all that is that it’s revenue-positive within ten years. So it’s a win for government, a win for disabled people, and a win for employers, who can access an untapped resource in a tight labour market. Everyone’s a winner.
Ben Jefferson: That brings us pretty much to the end. It sounds like some really practical and reasonable suggestions for an area that looks like it desperately needs reform. Owain and Sam, thank you very much for joining me on today’s Grattan Institute podcast.
Owain Emslie: Thank you, Ben.
Sam Bennett: Thanks, Ben.
Ben Jefferson: The report Opening doors: Better jobs and fairer wages for disabled workers is available to read on the Grattan website.
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