More than half of people who have multiple sclerosis say they have suffered from anxiety over the changes, which has in turn led to ill health, MS Society said.
And 67% said they felt more anxious about how they would manage their condition in the future because of the reforms, according to a poll of 1500 people with the condition.
The new Personal Independence Payment (PIP) has contributed to the anxieties, the charity said.
The criteria for the highest rates of the new PIP are "so tight" that some disabled people could be left trapped in their homes because they could lose access to vital mobility equipment, a spokeswoman said.
And under the Employment Support Allowance, "thousands" of people with MS and other degenerative health conditions were incorrectly told that they're fit for work, or that they would 'recover' enough to work again, she added.
"This is deeply concerning," said MS Society chief executive Michelle Mitchell. "For many, MS is a fluctuating condition and research has shown symptoms can worsen when people are anxious or stressed - ultimately making their condition harder to manage, or more costly for the NHS to treat. It's a false economy."
A Department for Work and Pensions spokesman said: "We have worked closely with disability organisations and disabled people themselves as we developed PIP so it can better reflect today's understanding of disability, particularly covering fluctuating conditions.
"We are introducing the new benefit with a gradual phased introduction to allow us to test the claim process."