The man, who is in his early 20s, applied for 8.9m NOK ($1.5m) from Norway's criminal injuries compensation office to cover his lost income and the cost of the treatment and help he needs.
He has received just 1.7 million kroner ($280,000).
Nadia Christina Hall, the man's lawyer, called the Norwegian government's decision "incomprehensible".
The criminal injuries compensation office is inflicting on terror victims the added burden of having to fight the government to get what they are entitled to by law," she said.
"These are young people who struggle hard enough just to be able to walk around, study and live in the same way as their peers."
Her client, who is not revealing his name as he does not want to be seen a charity case, was still a teenager when he was shot several times on Utøya, making it difficult to estimate his lost income.
His ability to concentrate was badly hit by his injuries, and his grades in schools dropped dramatically.
He is incapable of doing sports, and can only do light housework, so when he stops living with his family, he will require assistance for the rest of his life.
In the months after the terror attacks, the Norwegian parliament changes the law so that victims of the Utøya attacks could receive more than 5m kroner cap on compensation.
"The changes in the law were made to strengthen the position of the victims of the violence," Hall said. "As a lawyer, I now find that the beneficiaries have still not been strengthened. Time has passed and now the government has forgotten."
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