The Government is being accused of leaving disabled people and their families in the lurch.
It is using just 10 percent of its $23 million budget a year to support carers of disabled family members and New Zealand First says its time for a shake-up.
Family carers are paid on average about $500 a week.
The Government set up the Funded Family Care Scheme in 2013 after a court ruled it was discriminatory not to pay family carers.
However, it has said it was only spending about $2 million each year, supporting about 200 families, to care for a disabled family member for up to 40 hours a week.
New Zealand First List MP Barbara Stewart said the Government originally said the money was intended to help 1600 families.
"Basically the whole Funded Family Care Scheme is flawed. It requires a major shake-up because we need to ensure that the families that are caring for people with disabilities get the support that they were promised and that they need."
Mrs Stewart said it showed how out of touch the Government was with the needs of disabled people.
"We need to be in touch with the carers to find out where it is going wrong before we make some major changes."
Green MP Catherine Delahunty said the system was punitive.
"Basically the system is punitive, difficult to work, minimal in terms of what it pays and unfair and therefore not a solution to the family care issue."
Ms Delahunty said the Government must go back to the drawing board.
"What is needed is a conversation, a brave conversation, that the Ministry of Health has refused to have about what would work and what are the real needs and the Ministry of Health has been terrified to have that conversation because they are terrified that thousands of families will want this help."
Chairperson of the New Zealand Carers Alliance John Forman said the scheme was doomed to fail from the outset.
"We know that the Government didn't want to do it in the first place and they were forced to by the Human Rights Commission and the courts. It appears that they brought in a scheme which was, well, mean-spirited and nasty in the way it was constructed so as to make it very difficult for people actually to qualify."
Mr Forman said under the scheme the disabled person became the carer's employer and that meant responsibility for tax, leave and health and safety.
He said that was one example of why the scheme was unworkable.
"It is the kind of provision which was completely irrational and one which fits with a scheme which was absolutely intended to fail."
In a statement, the associate Health Minister acknowledged the uptake had been limited and said that was partly due to some families resistance to becoming employees under the scheme.
Peseta Sam Lotu-Liga also said some families did not want to be paid to care for their disabled family member.
However he said people who were receiving funded had reported a significant positive impact on their lives.
