A caregivers umbrella group says a policy to pay carers of disabled family members is unworkable and its implementation is an unmitigated disaster.
The Health Ministry has revealed only 97 families of the 1600 eligible are receiving the minimum wage under the scheme.
The Government provided $23 million in last year's Budget for the scheme after a court ruled that not paying the family carers was discrimination.
However, the chair of the Carers Alliance says the policy has been implemented in such a way as to discourage people, including designating the disabled person as the employer.
John Forman says the policy was targeted at those with the highest need but it is unrealistic to expect very high needs people to exercise the responsibilities of an employer.
"In most cases it was expected the adult would be profoundly disabled, probably with multiple disabilities, and yet they were the one who would have the responsibility of being the employer and that is completely ridiculous."
Mr Forman says many carers are shocked and frustrated by the complexity of the scheme and it is unworkable. He says the policy is intrusive and brings an employer dimension into family relationships.
He says the organisation warned the ministry the scheme was unworkable and it's been proved right.
"It's impractical to designate a disabled person as the employer of a family member. The Government seemed to have complete confidence in families when there was no payment involved and to bring in a very complex and convoluted system once a small payment was involved is really insulting to the carer and actually exploits, in a very abusive way, the disabled person.
"The whole policy is mean-spirited and nasty and it was put in place by a minister [Tony Ryall] whose hand was forced by a court decision."
Mr Forman says Tony Ryall didn't like the court ruling so made it as difficult as possible.
IHC wants scheme revamped
IHC general manager of programmes Janine Stewart blames the low take-up on complicated criteria.
She says the cared-for person is required to be the employer of the caregiver, which is difficult for cases involving intellectual disability.
"It needs to be explored further, other options, whether that be that some organisations provide that intermediary role or actually they re-look at the whole policy and rethink of it more as a payment than an employment relationship."
Carers New Zealand chair Roger Palairet says the low uptake is because the policy is seen as having a low level of benefit for family caregivers.
He says the thresholds are hard for people to get over in order to get the payments and once they have they are only eligible for the minimum wage.
Mr Palairet says the group warned the Ministry of Health when it designed the policy that it wouldn't work.
"It didn't given enough credence to what the NGOs were saying to avoid these pitfalls. The idea that you may only get 10 hours is a disincentive and keeps the numbers down and people out of this payment scheme."
Mr Palairet says people are assessing the risks of the ministry's scheme and realise they could be worse off by being involved in it.
"The minimum wage is a discriminatory wage - others who come in from outside the family will usually get paid more."
"The health and disability sector identified the policy's risks but the Government ignored our advice so its outcome was pre-determined and we're seeing its effect."
Roger Palairet says the health system has been getting a free ride for years due to family members caring for their disabled family members for free - and this scheme has not changed that.
Ministry of Health defends policy
The Ministry of Health is defending the implementation of the policy to pay carers of disabled family members.
Ministry spokesperson Jill Lane says it expected a very low take-up to begin with.
"The option's only been available since October last year and it takes time for disabled people and their families to take up new options when they come available, we see that routinely with every other new initiative we put in place."
"Certainly for the Funded Family Care it is an employment relationship but we do have a host system that sets up the system for them, then once that system's up and running it's pretty easy for it to be automated from there."
Ms Lane says the ministry finds that the families and disabled people who do take up this option are quite happy with the system, that the organisation and the co-ordination of getting it sorted is set up for them.
"We have the Needs Assessment and Service Co-ordination team working very closely with the disabled person and their family to make sure it is the right option for them and then when the family does decide and they're eligible, they can be put in touch with the host. We've had no complaints from these people who have joined the system that it's been difficult or that it's hard for them to continue on with it."
Ms Lane says the ministry is encouraging disabled people to consider the option at every opportunity.