A trial of independent assessments for National Disability Insurance Scheme participants and new applicants has exposed major problems.
The federal government will not pursue the proposed changes until the issues are ironed out.
"There are improvements that need to be made," Disability Minister Linda Reynolds told ABC radio.
The shortcomings were revealed by the government's own independent advisory body on the NDIS, which recommended the plan for independent assessments not proceed in its current form.
The agency identified problems with those conducting assessments in the pilot program and the experience of participants in the lead-up.
It also raised concerns about how the assessments were carried out and the amount of choice participants were given in who conducted them, along with the problematic use of pre-existing information.
"These are all things I absolutely acknowledge need to be improved," Senator Reynolds said.
"The independent assessment process that was trialled over the last few months will not be the process that we finalise, because we do have to make changes."
Labor disability spokesman Bill Shorten said the independent assessment pilot had clearly failed.
"Time to stop independent assessments," Mr Shorten said.
While conceding changes need to be made, the federal government is still determined to introduce independent assessments for NDIS participants and applications.
Senator Reynolds argues the changes will stem an "eye-watering" escalation in the cost of the scheme, which is projected to hit $60 billion per annum by the end of the decade.
"We are on an unsustainable growth trajectory," she said.
"This is not about cutting expenditure on the scheme, it is about putting it on a sustainable growth trajectory so this scheme will endure."
Labor, the Greens and advocates fiercely oppose the changes and have challenged the "outlandish, rubbery" figures released by the government.
Senator Reynolds said independent assessments were not unique to the NDIS, saying all other workplace injury and disability insurance schemes had similar systems in place.
"This is nothing new," she said.
"This is genuinely not about cutting costs, this is actually about making the scheme fairer."
The minister said without the introduction of eligibility assessments, people's postcodes and socio-economic circumstances would continue to be factored into their support packages.
"The further you are away from a capital city and the less ability you have to advocate for yourself, the lesser of an outcome you get from this scheme. That is simply wrong."
Several states and territories have spoken out strongly against independent assessments.
But Senator Reynolds is confident she will get a good hearing when she meets with her counterpart ministers on Friday.
"Ultimately this is a scheme of the federation and we all have to agree on a multi-partisan basis about where we take this scheme into the future," she said.