Disability wage tool defeated in Senate

National Breaking News National

The federal government has suffered a surprise defeat on a temporary scheme to determine future wages for intellectually disabled Australians.

The federal government on Monday was confident it had the support of enough crossbench senators for its temporary scheme - known as a business services wage assessment tool - to pass the upper house.

But despite securing the support of the Palmer United Party the legislation was defeated, with three key crossbench senators siding instead with Labor and the Australian Greens.

Assistant social services minister Mitch Fifield, who argued the scheme would have given disabled Australians greater choice, was clearly unimpressed.

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"There will now not be a business services wage assessment tool payment scheme because of the way you voted," he told the chamber.

In its original form it evaluated thousands of Australians with disability, determining their pay based on their competency and productivity.

Wages can be as low as 33 cents per hour.

The court in 2012 found two intellectually disabled employees were discriminated against by using the tool and the government moved to replace it.

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Disability wage tool defeated in Senate