Children with high-needs disabilities are living in child protection because their parents can no look longer after them, with advocates blaming a lack of support from the National Disability Insurance Scheme (NDIS) for forcing parents to give up their children.

Key points: The McNeills gave their son up to state care because he needed 24-hour supervision and they did not have enough help from the NDIS

The McNeills gave their son up to state care because he needed 24-hour supervision and they did not have enough help from the NDIS Only half of the 48 children living in residential state care in Victoria have some form of NDIS support

Only half of the 48 children living in residential state care in Victoria have some form of NDIS support The situation was labelled "horrendous and appalling" by advocates, who say children have a right to stay in their own home

Government officials, advocates and care workers say it is "absolutely horrendous" that children with high-needs disabilities, who have been voluntarily relinquished by their parents, are living in the over-stretched residential care system, sometimes without NDIS support.

Before the scheme was introduced, Victoria provided some specialised care for those with a disability, including group accommodation — but now some go to child protection.

The advocates said had the NDIS provided specialised care, it would have prevented families from giving up their child to state care in the first place.

Rod and Martina McNeill were in the process of relinquishing their son Alex last year because they could no longer cope with his high needs.

Alex, 10, has a severe level of autism and other intellectual disabilities.

He requires 24-hour supervision to stop him self-harming and hurting others.

At his worst Alex smeared faeces in his home, he regularly ran away and often stood in the road oblivious to the dangers of cars.

"He self-harmed himself so bad by smashing his head in the floor, he was literally picking holes in his skin on his feet,'' Ms McNeill said.

"He was scratching his legs and his upper body, so there were just huge scratch marks that were bleeding all over him and we went 'what do we do?'"

Rod and Martina McNeill say Alex's behaviour improved with specialist care but he is not ready to return home. ( ABC News: Kyle Harley )

Repeated, confronting incidents caused Ms McNeill, who has four other children, to have a breakdown.

Support from NDIS was limited, and every effort to increase support was a battle, the family said.

"They essentially said we have provided the needs for his disability, if you can't look after him as parents you need to relinquish him,'' Mr McNeill said.

The pair made the heartbreaking decision to relinquish their son into care.

But, Ms McNeill said, child protection had nowhere for him to go and eventually NDIS provided funding so Alex could attend a specialist care centre in Melbourne.

Irabina Autism Services has helped Alex improve his behaviour, but funding for that service has run out — and his parents say he is not ready to come home.

Children have a right to stay at home

As depressing as Alex's story is, it is not unique.

There are children and teens with high-needs disabilities living under the care of child protection across Australia.

In Victoria, there are 48 children who have been voluntarily relinquished living in residential state care; only half of them have some form of NDIS support within the system.

Michael Perusco of Berry Street says families like the McNeills should be getting a much better service. ( ABC News: Richard Willingham )

Prior to the NDIS, Victoria provided specialised out-of-home care for some disabled children.

Prime Minister Scott Morrison's pre-election budget revealed a $1.6-billion under-spend in the NDIS, which has infuriated advocates and users.

"To have children using a child protection system and to tell parents that is all that is on offer, when they actually probably know what their kids need, is just appalling,'' said Deb Tsorbaris, the chief executive of the Centre for Excellence in Child and Family Welfare.

Victoria's Commissioner for Children and Young People Liana Buchanan monitors child protection.

"We have children with disability who have additional needs because of those disabilities end up being removed from their families and put in out-of-home care, particularly our very stretched and frankly very flawed residential care system is absolutely horrendous,'' Ms Buchanan said.

The commissioner has raised concerns about the state of residential care.

"These children have a right to stay at home with their families who are getting the right supports … the fact these kids are ending up in out-of-home care is appalling."

NDIS failure 'causing harm'

Staff working in child protection and residential care are not trained to deal with higher-needs clients and service providers like Berry Street said it was having a negative impact.

Residential care units — known as 'resi care' — are already volatile places with at-risk children living there.

"It can cause conflict, it can cause some occupational violence and be a very difficult environment for those staff and the young people involved," said Michael Perusco, the chief executive of Berry Street.

"This is a failure of the NDIS that is causing harm and distress to children as young as 11, who should be getting a much better service than this."

A spokesperson for the National Disability Insurance Authority (NDIA) said the intention of the scheme was to support families to continue to care for their children and to keep families strong.

"The NDIA wants to reassure participants and their families that they are not required to relinquish their children in order to gain access to appropriate disability-related supports,'' she said.

The NDIA says families do not have to relinquish their kids to get appropriate disability support. ( AAP: Mick Tsikas )

The authority said at the end of March there were 34,000 people in Victoria under the age of 18 receiving support.

"The Victorian Government has legislation in place to support families in crisis and continues to be responsible for providing appropriate housing and supervision for children in both voluntary and involuntary out-of-home care,'' the spokesperson said.

Victoria's Minister for Child Protection, Luke Donnellan, said he and other state ministers had raised the issue with the Federal Government.

They also want help for those living in state care.

"The reason these children should be allowed into the system of the NDIS is because their issue is their disability," Mr Donnellan said.

"It's not that their parents don't love them, it's not that their parents aren't caring for them, it's that their behaviour is a danger to the parents."

The Labor minister pointed the finger at the Morrison Government for "depressing demand" for NDIS services.

A spokeswoman for the Federal Coalition said there had been no changes to the eligibility requirements for the NDIS since the scheme was first introduced by Labor in 2013.

It has promised to improve the scheme if re-elected.

"The Coalition are proud supporters of the NDIS — it is important to get it right,'' the spokesperson said.

Federal Labor's Linda Burney said the situation would be fixed, promising to work with states for "a person-first approach to the NDIS".

"This will mean that children in out-of-home-care and their families would get the services they need up front, and the state government and NDIS would work out who pays later on,'' she said.