The school system is failing children with a disability, with a national inquiry finding they are routinely refused enrolment, bullied and abused.

The Education and Employment References Committee, which oversaw the Federal senate inquiry into how children with a disability fare at school, was "shocked and saddened" by evidence children were being denied their right to an education.

Committee chairwoman Labor senator Sue Lines said the findings of the inquiry showed a "disgraceful" level of discrimination.

"We are failing children with disability in the school system," she said.

"They are refused enrolment, they are only going a few days a week or not going at all. If they do attend school, bullying and exclusion are the norm. It is disgraceful.

"This inquiry has lifted the lid on the failure to provide these children with the basic human right to an education."

The inquiry received almost 300 submissions from families of children with a disability, education experts and disability advocates, outlining a culture of low expectations for children with a disability.

Chief executive of Children with Disability Australia Stephanie Gotlib​ told the inquiry: "To have any chance of accessing your basic education rights in Australia, students with disability must rely on fierce advocacy - usually by families - and the stars aligning."

Albion Park mother Melissa Smith gave evidence that she had to "convince, beg and persuade" her local school to accept her daughter Lily, who has a disability.

The inquiry heard evidence that a large number of public schools were ignoring a legal requirement to accept children in their local catchment on the premise that they could not provide for a child with a disability.

It also identified shortfalls in staff training to help them support children with disability.

"We would like to see improved training for staff working in schools so they can provide the supports these children need to learn," Senator Lines said. "The evidence before the inquiry is that when children are given the proper supports, they do well.

The inquiry heard evidence of a funding shortfall, with 4.9 per cent of children receiving disability funding despite ABS figures showing 8.8 per cent of children aged 5-14 having a disability.

The committee recommended the Federal Government commit to needs-based funding, according to the Gonski Review. It also warned that a reform which will link school funding to the Consumer Price Index from 2017 will force some schools to close.

It called for the re-instatement of a dedicated Disability Discrimination Commissioner at the Australian Human Rights Commission and demanded an end to restrictive practices, such as placing children in cages or tying them to chairs.