Two state governments from opposing sides of politics have teamed up to accuse the Federal Government of short-changing people with a disability.

Key points: NSW and Victoria are demanding the Federal Government release money to help people with a disability

NSW and Victoria are demanding the Federal Government release money to help people with a disability The last federal budget revealed a $1.6 billion underspend in the NDIS

The last federal budget revealed a $1.6 billion underspend in the NDIS The Federal Government dismissed suggestions it withheld funding from people with disabilities as "ridiculous"

In an extraordinary bipartisan attack, the New South Wales and Victorian governments have argued a $1.6 billion underspend on the National Disability Insurance Scheme (NDIS) was being used to prop up a budget surplus.

Liberal NSW Disability Minister Gareth Ward and his Victorian counterpart Luke Donnellan have joined forces to demand the Commonwealth release the money.

The state ministers have penned a letter to the federal minister responsible for the NDIS, Stuart Robert, saying they had been trying to work collaboratively to access the funds.

Mr Ward said he had approached Mr Robert several times over the issue but had been unsuccessful in getting the money released.

"I want to make sure that money doesn't sit in a bank account offsetting the Commonwealth's budget, which is what it's doing," he said.

"I want to see it improving the lives of people."

The last budget revealed a $1.6 billion underspend in the NDIS, which boosted the Federal Government's bottom line for the 2019-20 financial year.

The Coalition has consistently said that was because of the transition of the scheme's rollout, and no eligible Australian was deprived of the funding they needed.

But Mr Ward said there were significant barriers for people outside of affluent areas in NSW to access NDIS assistance.

"I don't want postcodes to determine who receives support," he said.

"Particularly in regional areas, Aboriginal people and people with disabilities from culturally and linguistically diverse backgrounds haven't been on the same level playing field as everybody.

"For example, if you have a disability and you live in Bronte, you'll have access to phenomenal opportunities. But the further away from city and metropolitan areas you go — the less opportunities."

The states and the Commonwealth have agreed to establish a NDIS reserve fund, but documents from the last COAG disability reform council meeting show discussions around how the fund will operate are still taking place.

Mr Ward said the states have been told the reserve fund won't be finalised until after the May Budget.

The timing is significant, given the Federal Government's promised budget surplus is under threat as the country deals with the economic fallout from the coronavirus and a bushfire emergency that ravaged communities for months.

But Mr Ward said in the interim, people with disabilities were suffering.

"There's $1.6 billion sitting on the Commonwealth balance sheet that we want to spend on people with disabilities," he said.

"I've heard cases of people who sit in a room all day with no support, looking at the four walls. I've heard people who want and need things like occupational therapists, who need allied health supports and have not been able to find them. That is a product of a lack of action."

Federal Minister refutes underspending allegations

Mr Robert dismissed suggestions his Government had withheld funding from people with disabilities.

"It is a ridiculous story from a ridiculous letter written by two governments that want money to spend on other projects," he told ABC Radio Melbourne.

"I can't refute this more strongly than that.

"The New South Wales and Victorian governments just want their half of it so they can spend it to prop their budgets up. And that's not what it's designed for. It's designed to be spent over time."

On Sydney radio station 2GB, Mr Robert also accused Mr Ward of playing politics with the issue, saying he leaked the story after failing to obtain funding.

But Mr Ward strongly refuted the allegations, describing them as an "unfortunate deflection."

Mr Ward, who is the only minister with a disability to hold the portfolio in the country, said he was unusually placed to fight for the funding.

"Unlike Minister Robert, I have lived experience of disability," he said.

"I want people with disability to reach their full potential and I don't want this money sitting in a bank account anywhere."

Federal Labor NDIS spokesman Bill Shorten accused the Coalition of "stinginess" in failing to meet the needs of people with a disability.

"They have been sprung breaking a funding deal with Liberal and Labor state governments," he said.

"It's time Stuart Robert stopped the handballing and obfuscating and started taking responsibility for people with disability."