States demand federal disability funding

Victoria and NSW have launched an attack on the federal government over disability funding, accusing it of withholding $1.6 billion to help protect a budget surplus.

The coalition and Labor state governments have teamed up to demand the immediate release of reserve money meant for the National Disability Insurance Scheme.

State ministers have written to federal NDIS Minister Stuart Robert saying the situation is unacceptable, Nine newspapers reported on Friday.

NSW Disability Minister Gareth Ward and his Victorian counterpart Luke Donnellan argue there are many measures which could be deployed to improve the scheme.

''Money that is unspent at present is offsetting the Commonwealth's budget position and the NDIS should never be used as a budget measure - whilst we're sure this isn't the intention, it is a fact," the letter says.

Mr Robert said the reserve fund was not being used to shore up a surplus.

"The NDIS is a demand-driven scheme and all funds needed for it from the Commonwealth are available now,'' he told the newspapers in a statement.