Thousands of people involved in the program could be harmed, a Senate hearing debating the future of the National Disability Insurance Scheme was told on Thursday.
''It will have serious, potentially fatal impacts on people with disability,'' Jessica Cadwallader, chief executive of national advocacy group Inclusive Rainbow Voices, told the inquiry.
The government's proposed amendments, announced in the May budget and yet to be legislated, would slash $37.8 billion from the program over four years and kick 160,000 people off the scheme.
The reforms, designed to stop the NDIS from growing at an unsustainable pace and crack down on fraudulent activity, have received broad criticism from advocates of the disabled community.
Dr Cadwallader told the hearing about a gay and disabled man named Chris, whose surname was withheld for privacy, who had previously lived with his ageing and conservative parents at home so he had to conceal his identity to live safely.
NDIS funding changed his life because it allowed him to move into another home with other LGBTQI people, the hearing was told.
"He ventured out with support he chose ... to connect with the community he had longed to be part of for so long," Dr Cadwallader said.
"He could name and express his identity for the first time out loud, connect with other gay men, attend drag bingo, and begin to live his life as he had dreamed.
"But Chris, along with many others like him, is anxious that with these reforms he will be forced back into the closet ... forced back into the family home."
Dr Cadwallader also raised fears about gay-conversion therapy still being practised in parts of the country.
The comments came after Greens Senator Jordon Steele-John told the hearing NDIS recipients may be denied funding access if they haven't tried all medical treatments.
"We've heard examples such as electroshock therapy being required for people with psychosocial disability," he said.
The Australian Human Rights Commission on Wednesday called on the federal government to pause the NDIS changes until significant human rights concerns were addressed.
Community participation spending, which is used by disabled people to access medical appointments, social activities and even work, is expected to be halved under the changes.
The federal government hopes to move the thousands of people with more mild and moderate disabilities on to state-run programs.
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