The role has gone to Tariana Turia, who is a minister outside of Cabinet, as well as co-leader of the Maori Party.
Labour Party spokeswoman on disability issues Lynne Pillay, yesterday said Ms Bennett had never been up to speed with the social development and employment portfolio.
"Paula Bennett's decision underlines both her inability to understand the issues and her lack of commitment to the people and the sector," Ms Pillay said.
Ms Bennett told Radio New Zealand that disability issues was a big portfolio.
"I went to the Prime Minister (John Key) and said `boy we are dealing with increasing numbers of unemployed, it's a big job social development and it's getting bigger every day.
"I think I need to concentrate exactly where it needs it."
She was unhappy with amount of time she was putting into the disability portfolio.
"Minister Turia put her hand up and said she would love it, she was speaking as the associate, and I just think it's in a great pair of hands with someone who really wants to move it ahead and do some work there."
Mrs Turia yesterday welcomed the new role.
"I appreciate the confidence the prime minister has in me and my main focus will be to make sure disabled people and their families can fully participate in society," she said.
Ms Bennett was asked if keeping on top of increased numbers of unemployed was her job or that of the chief executive.
"I certainly drive the policy direction and the priorities of the ministry and at this time it's about us keeping our head -- in the government -- focusing on what's important and that's where my attention is and where it needs to be."
Unemployment was around 45,500 with the budget forecast predicting it could go as high as 81,000 in 2010.
"That's a lot of people who need our assistance."
Ms Bennett said not all was doom and gloom, with about 30 percent of people seeking to go on welfare instead being put into jobs.
The government's ReStart scheme which provides 16 weeks of temporary top-up support for those made redundant had seen 475 people cancel it before it ended because they got work.
