CCS Disability Action, which provides support services to disabled people, has called for a comprehensive review of the way the Government funds disability services.
Chief executive David Matthews said the research showed New Zealand had made disabled people "invisible".
"Yet their stories also highlight that solutions to these problems lie not in more funding, but smarter ways of using it, combined with a shift in social attitudes."
Mr Matthews said that despite three decades of policies to include disabled people, New Zealand had failed to ensure they could lead normal lives.
"Our findings question not just the way that funding and services are provided but also highlight the many barriers to full social participation that exist in society today.
"It is clear that we are failing this group of people, failing to meet our obligations under Article 19 of the UN Convention and simply need to do better."
For half of the participants, a family member was directly involved in co-ordinating and providing direct support, most often in the family home they had grown up in.
Half the adults interviewed remained in their family home because of fears their quality of life would be undermined in residential care homes.
The participants were not involved in employment, continuing education, sporting, recreational, creative, cultural and political communities.
They also spent an average of 90 per cent of the week at home, with community involvement typically restricted to public spaces or segregated activities.
Mr Matthews said some people still believed people with high and complex support needs could not have a home of their own.
"The community group home is still considered in some sectors, the only living arrangement that can meet their physical or behavioural support needs - a view which this research challenges.
"In the wake of this study, we're calling on the Government to take urgent action."
A spokeswoman for Disability Issues Minister Tariana Turia said she wanted to see the research before commenting.
Ms Turia was travelling in a remote area of the King Country and was not available for comment today.