Severely disabled people unhappy with their care package will be offered independent assessments, say ministers.
The Welsh Independent Living Grant (WILG) is being scrapped with councils taking over funding care for the more than 1,000 people receiving it.
Previous social care minister Huw Irranca Davies had insisted there would be “no losers” due to the changes.
But, in October, BBC Wales discovered around 100 of the 600 recipients reassessed had lost some support.
The research was conducted by the Wales Live programme.
On Tuesday, the Welsh Government said anyone wanting a “second opinion” could have an “independent social work assessment” and the move to the new system would be put on hold while new arrangements are put in place.
Plaid Cymru said the Welsh Government should “admit it has got this one wrong from the very beginning”.
Announcing the change in policy, Deputy Health and Social Services Minister Julie Morgan said: “It is paramount that people’s ability to live independently is not compromised by changes the care and support provided for people previously in receipt of the Welsh Independent Living Grant.
“These changes will ensure that is the case and deliver a consistent level of care and support across Wales.
The WILG was introduced in Wales to replace the UK-wide Independent Living Fund (ILF), which was closed down by the UK government in 2015.
“While the majority of former ILF [Independent Living Fund] recipients are receiving the same or more care as they were previously, a significant number have experienced a reduction in hours of support,” said Mrs Morgan.
“There is also considerable variation in the reductions in support.
“I have therefore written to local government leaders to request a pause of the transition with immediate effect in order to bring in the revised arrangements.
“This is a significant change of approach that ensures that the needs of former WILG recipients will be fully met, and that resources are no barrier to a full package of care and support.”
Mrs Morgan also announced that the Welsh Government would provide additional funding to councils for the cost of the workers to carry out these independent assessments and additional care hours that may result from the assessments.
The independent assessments will be consistent with people’s agreed “wellbeing outcome” and acknowledge the historical entitlement of former ILF recipients, she added.
Plaid Cymru’s Leanne Wood said the Welsh Government should “admit it has got this one wrong from the very beginning”.
“After the proposed changes are filtered through, we should thankfully have a situation where no disabled person has lost out on care.
“However, we will be spending considerably more money on administration and reviews to get to this point than if the Welsh Government had just adopted the Scottish and Northern Ireland approach of retaining the fund – as we argued for at the time.”
Huw David, Welsh Local Government Association social services spokesman, said: “In a time of austerity, any additional funding for social care is to be welcomed and I am pleased to see a commitment of extra investment from Welsh Government that will help to ensure the needs of former WILG recipients are fully met.
Local authorities would continue to work with ministers to address any concerns about the new system, he added.
By Wales Live reporter Paul Martin
With an acknowledgement a “significant number” of people have had support cut, a guarantee of independent re-assessments, and extra cash for any increased care packages, this adds up to a pretty big shift.
It puts new Social Services Deputy Minister Julie Morgan at odds with her predecessor Huw Irranca Davies who had said the new council-run system would be fairer and that there would be “no losers.”
There are questions now about how easy this change will be, and how much it will cost.
But “Save WILG” campaigner Nathan Lee Davies – who won significant support at Welsh Labour conference – described it as “the perfect 42nd birthday present”.