The first stage of a major federal government overhaul of welfare payments has suggested that only people with a permanent disability receive the Disability Support Pension and has flagged greater government control over how people spend their benefits.

The report  has also suggested that the system will be cut down from 75 payments and supplements to just four payment categories, covering a tiered working age payment, family payment, disability payment and the aged pension. 

"I have spoken with many people with a disability and their families since the announcement and the largest fears for most are security of their income support, that the current level of financial support is not reduced and that any changes to administrative processes do not make the system more burdensome or complicated," Ms Davis said.

"The cost of living with a disability in our community is higher so any reduction to current levels of income support will place extreme financial pressure on individuals and families who are already struggling.

"There are other budget measures announced, like the GP co-payment, that if implemented will further compound the impact."

Ms Davis said any changes needed to account for the support that people with a disability may need to actively participate in the workforce.

"It would be a shame to see people wanting to work not given the opportunity," she said.

"There are some people with a disability who due to the complexity of their disability may be ‘assessed’ as having no capacity for work but, with the right supports in place, could very successfully participate in the workforce. Although the definitions of ‘permanent disability’ and ‘capacity to work’ are yet to be defined I also have fears that many people with a disability and their families may make a choice not to explore employment, even if they have capacity for an hour ..."