Health Minister Tony Ryall today announced $23 million a year would be set aside over the next four years to pay family members who look after disabled adult relatives.
The funding comes after a landmark Court of Appeal ruling which paved the way for family members to be paid as carers.
In 2010, the Human Rights Review Tribunal ruled a Ministry of Health policy to pay carers only if they were not related to the patient was discriminatory.
The Government appealed the decision, but Mr Ryall last year signalled it would not appeal the Court of Appeal's ruling.
Mr Ryall today announced $92m would be spent over four years on payments to family members who care for about 1600 disabled adults with high and very high needs.
Legislation to implement the new policy, which comes into effect in October, would be introduced today.
Mr Ryall said the new policy was a significant investment in family care "and will give more disabled people and their families more choice and control in the support they receive.
"Disabled adults who meet the eligibility criteria will be able to choose whether they employ a family carer or continue to use a contracted provider.''
But Green Party MP Catherine Delahunty said the new legislation was an attack on the rights of disabled people.
She said the $92m would not be available to family carers unless the Ministry of Health or district health board (DHB) decided to pay them - and then they could be paid less than non-family carers.
Ms Delahunty said family carers would be divided between those who made claims before today's Budget, and those who did not.
Mr Ryall said the $92m for family carers was in addition to an extra $100m which had been allocated to disability support services over the next four years.
A total of $1.1 billion will be spent on disability services this year - accounting for 7.5 per cent of the $14.7b allocated to health in this year's Budget.
Total health spending is up $406m on last year's Budget, which includes $191m in savings and re-prioritised spending from elsewhere in the health budget.
The extra funding includes $18.2m for a new mothers and babies initiative, which Mr Ryall is expected to announce the details of shortly.
It also includes $4.3m over four years to raise awareness of prostate cancer and ensure men have better access to information about the disease.
Mr Ryall said health spending this year was its highest ever, with the sector receiving a third of all new operating funding in this year's Budget.
He said careful financial management and savings at DHBs had allowed the Government to invest in new health initiatives.
"While many developed countries around the world are freezing or even reducing health funding, this Government is committed to protecting and growing our public health services.''
Of the new spending, some $250m will go straight to DHBs to take account of inflation and population increases.
The spending will also go towards new initiatives, announced before today's Budget, including including $21.3m to fight rheumatic fever and $35.5m to fight diabetes and heart disease.
Another $48m will go towards more elective surgery; $25m will be used to increase screening for diseases such as breast cancer; and $7.3m will fund 20 extra medical students, in addition to 120 new places already funded by the Government.
