Disability Issues Minister Nicky Wagner has strongly condemned a national disability support provider over a contract dispute - saying Idea Services has been "totally irresponsible" and let down vulnerable clients.

Wagner was responding to questions from Labour MP Poto Williams in question time today. Williams tabled a letter from Idea, the operational arm of IHC New Zealand, informing families they were unable to provide any Autism Spectrum Disorder services because of underfunding.

Wagner, also Associate Health Minister, said she had been told by the Ministry of Health that it was only advised last week that Idea did not intend to renew its contract, after the service had previously indicated they would renew.

"They also gave no notice to their clients. And what is worse, Idea Services refused to agree to a temporary three month contract to allow arrangements to be made to look after their clients."

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Asked by Williams what she would say to people affected by the cut services, including a woman who told the Labour MP her two autistic children were in "crisis" before help from Idea, Wagner said she would say the service provider "is being totally irresponsible".

"We all know that change can be difficult for some people and their families, and particularly for this cohort of clients, for whom routine and security is so important," Wagner said.

"It is just not acceptable that Idea Services has refused to allow a transition period. And what's more, only told their clients after they cut the service," Wagner said, to calls of "shocking" from a colleague.

Afterwards, Williams said Wagner's response was "startling".

"They have been working with the Ministry to provide alternative providers. For the Minister to say they're abandoning people because of her underfunding is nasty and disingenuous.

"The Government has failed to adequately fund and support workers who care for some of our most vulnerable people. When called on to explain this, the Minister blamed Idea."

Idea's letter to families on April 4 says it was "with huge regret" that the service had to stop delivering Autism Spectrum Disorder courses after the end of this month.

The Ministry of Health contract had run since 2013, and demand for services had created waiting lists, the letter states.

"Working towards the renewal of the contract we raised issues about the waiting list and the expectations of delivery without sufficient funding. Unfortunately with underfunding of over $500,000 in the 2016/17 year and no offer of an increase for the coming year we cannot continue to provide the service," the letter states.

"We are very sorry that this has occurred and that we have not had the opportunity to give sufficient notice to enable continuity of services."

A spokeswoman for Idea told Radio New Zealand Wagner had been misinformed.

"We have been discussing this particular contract for six months, and in fact we have been asking to see the contract for three [months]...we feared it would come in at a price we couldn't manage. And it came in late last week, and our fears were realised.

"We have been telling them for months that we have been running this contract at a loss for three years and we just couldn't continue."