PEOPLE with disabilities will receive immediate assistance to retrain and learn new skills as part of the Federal Government's push to rein in welfare expenditure and get people into jobs.

Places in training and employment programs will no longer be capped, the Minister for Employment Participation, Brendan O'Connor, said yesterday.

"This removes a significant hurdle that has required people with a disability to wait for employment services and that has, for example, prevented service providers from properly planning the transition of school leavers with a disability into the workforce," Mr O'Connor said.

Employers will also be able to apply for increased funding to help modify their workplaces.

The change follows a campaign by the Parliamentary Secretary for Disabilities, Bill Shorten, to encourage employers not to see people with disabilities as potentially difficult or unreliable workers.

Welfare and employment groups welcomed the changes announced by Mr O'Connor.

The changes were "the right policy at the right time", said Gerard Thomas, the policy officer at the Welfare Rights Centre. "The good news is that there will be quicker employment assistance for people with disabilities who, up till now, have had to languish in queues," Mr Thomas said.

"With only 11 per cent of people on a disability pension engaged in some type of paid work, there is still a long way to go."

He said the Federal Government should lead by example and set targets for employment in the public service, where the numbers of employees with disabilities has declined in recent years.

Announcing the changes, Mr O'Connor also defended the Government's awarding of contracts under the new $4 billion employment services system.

The new contracts are part of a redesign of the Job Network, which will be known as Job Services Australia from July.

"Some recent commentators have argued that the reforms should have been delayed because of the global recession," Mr O'Connor said.

"I would say to these commentators that the opposite is true and we need these changes even more now, and they go hand in hand with our investment in education and training."