Tackling discrimination and improving the outcomes for disabled people in the workforce should be prioritised over pension cuts, according to Charles Sturt University (CSU) lecturer Ms Marie Sheahan.

An Interim report of the McClure welfare review, A New System for Better Employment and Social Outcomes, proposes moving thousands of people off the Disability Support Pension if they have some capacity to work.

Ms Sheahan, from CSU's School of Humanities and Social Sciences in Albury-Wodonga, also cares for her adult daughter who has a disability.

She fears the proposed cuts will undermine the health and security of some of society's most vulnerable people.

"The eligibility criteria for Disability Support Pension are already very tight with more people applying than those receiving payments," she said.

"There is enormous discrimination in the Australian workforce towards employing people with disabilities.

"We tend to place a high value on efficiency and this doesn't necessarily fit with employing someone with a disability, no matter what other qualities they may bring to the job.

"Pushing people off the disability pension and into a workforce that doesn't provide adequate support or opportunities will result in poor social outcomes."

Ms Sheahan is also concerned about the impact of this proposed reform on people who have an episodic disability such as a mental illness.

"It has the potential to undermine their sense of security and create enormous levels of anxiety which may in-turn affect their health," she said. "If people are moved to the dole and have to seek work there's a risk they may not be able to afford medication to treat their illness and may be less likely to seek medical treatment."

Ms Sheahan, whose research interests include welfare reform and advocacy, is also calling for greater scrutiny of how Non-Government Organisations (NGO's) could potentially benefit from public funding associated with this reform.

"Non-Government Organisations were traditionally policy advocates for the care and support of people with disabilities. Indeed when the Howard Government proposed welfare reform the fiercest opposition came from these groups," she said.

"We now see Non-Government Organisations integrated into the employment system providing government funded services to people with disabilities and I believe there needs to be close examination of what these organisations stand to gain from proposed reforms. I note that the reaction this time round has been much more restrained than in the past."