"We're not exactly partying. It is good that this government has decided to settle but it doesn't fix the long term problem which is the choice that disabled people should have as we provide the care that they've been assessed as needing.
"Labour promised in their manifesto ... that they would repeal that part 4 amendment, and that's what we want."
Legislation know as the Funded Family Care legislation was brought in after an earlier group of families won a 12-year human rights case against the Ministry of Health in 2012, arguing it was discriminatory not to pay people on the basis of family status.
Although the legislation fixed some historical issues by finally allowing family members to be paid for their work, it remained discriminatory because spouses, or those with children under 18, were excluded.
In September the Government announced it would repeal the disability law, described as a "shame on society", and overhaul its policy on paying families who care for their disabled loved ones.
McDonald said the fight for justice had been "very, very hard over the years" and she thanked the journalists involved in their fight, especially the Herald's dogged pursuit of health officials over the years.
As for the court battle, she said most of the families wouldn't have been able to handle the court room environment anyway.
"Most of the plaintiffs are not in a position to stand six weeks in a court room hearing the lawyers argue backwards and forwards, so this is good, in that respect it's good, it's excellent.
"Some of us were quite looking forward to sitting in the court room and just seeing what arguments the [Ministry of Health] MoH was going to come up with this time."
Barrister Simon Judd confirmed a settlement had been reached, which would mean the families no longer had to go to court.
However, he said he couldn't comment any further as it was confidential.
In a statement, Associate Health Minister Julie Anne Genter welcomed the settlement.
"I am delighted that these hard working families haven't had to go to court and that a settlement has been reached in time for Christmas.
"I wish these families all the very best."
This week the Ministry of Health published the results of a targetted consultation process with affected families and stakeholders on the key issues within Funded Family Care.
It found strong support for repealing the discriminatory law and for family carers to receive equivalent pay to other care and support workers.
"Hearing the direct thoughts of the people who are affected by Funded Family Care was incredibly important, and underpins our commitment to work with those affected by the legacy of Funded Family Care and ensure any replacement works as well as possible for them," said Mathew Parr, the Ministry of Health's acting deputy director-general disability.
The ministry would now give advice to the Government on the feedback "that honours the experiences of those people".