Lawyers for the Crown have told the Court of Appeal that it would be financially unsustainable for the families of disabled people to be paid to care for them.
A full five-judge bench of the court in Wellington is hearing an appeal by the Ministry of Health against an earlier High Court decision that seven families have been discriminated against because they are related to those they care for.
The case was first heard by the Human Rights Tribunal in 1999 and its finding that parents caring for their disabled children should be financially compensated was later upheld by the High Court.
However, lawyers for the ministry say the current system recognises that families have an integral part to play in caring for their disabled children and it is there to support them in that, offering respite care when it is needed.
On Monday a number of carers and their disabled adult children were at the hearing, which is set down for seven days.