The Work Capability Assessment "defies belief", Parkinson's UK said after figures showed that 45% of people with four progressive diseases were told that they will recover enough to look for work in the future after taking the test.
Between 2008 and 2011, 13,600 people with cystic fibrosis, multiple sclerosis, Parkinson's or rheumatoid arthritis applied for Employment Support Allowance (ESA), figures show.
But 45% of those were deemed able to recover from their condition to the point where they can look for work, according to research from Parkinson's UK, the Cystic Fibrosis Trust, the MS Society and the National Rheumatoid Arthritis Society.
The charities called for ministers to rethink the "hugely flawed" system.
The assessments are carried out by Atos Healthcare on behalf of the Department for Work and Pensions (DWP).
Caroline Hacker, head of policy at Parkinson's UK, said: "This is the latest in a long line of unspeakable failures by Atos Healthcare and the Government when it comes to supporting those who need it most.
"These incomprehensible decisions go to show that many assessors, and those who rubber-stamp the decisions in Government, don't apply the most basic understanding of the medical conditions they are dealing with."
Jim Grimwood had been a computer programmer for 20 years when he was forced to give up work because of Parkinson's disease.
The 58-year-old, from the North Pennines, said: " It was six years after being diagnosed with Parkinson's that I was finally forced to give up work, so it can hardly be said that I rushed into it. After the first ESA assessment they said I should be able to return to work within three months.
"I was flabbergasted, as was everyone who knew me. Late last year I applied for ESA again as my Parkinson's had got worse. I was told that I should be able to return to work in 18 months. I asked to be reassessed but the DWP refused to change their decision.
"Decision-makers either fail to grasp, or choose to ignore, the practical difficulties involved in managing a condition which affects one's abilities to do even basic things every day, without the added burden of trying to do a job of work and comply with the terms of a contract of employment."
A Department for Work and Pensions spokesman said: "It's ridiculous to suggest that we think people with degenerative conditions will 'recover'. However, it is important that we don't simply write people off. There is strong evidence that working can be beneficial for many people who have a health condition - and as Parkinson's UK themselves point out, many people with Parkinson's continue to work for many years after their diagnosis.
"But we also want to ensure those who need it get the right support, which is why a decision on whether someone is well enough to work is taken after consideration of all the supporting medical evidence provided by the claimant.
"Someone who is placed in the work-related activity group for ESA is too ill to work and gets their benefits, but may with the right help be able to work in the future if, for example, they can manage their condition."
An Atos Healthcare spokesman said: "Our healthcare professionals are trained in the assessment of chronic and progressive conditions such as Parkinson's and understand that, sadly, some people's conditions will only get worse over time.
"However, the advice we are asked to give DWP concentrates on how individuals are affected by their illness at present. All decisions on the outcome of claims, for example whether they are placed in the WRAG or the Support Group, are made by DWP."
The spokesman said Atos would consider any relevant medical evidence presented by claimants during the process that would enable the DWP to make a more informed decision on benefit entitlement.
He said that "as agreed with the DWP, we proactively write out to GPs for further medical evidence where we believe that receiving it may mean we can avoid a face-to-face assessment for the most disabled and unwell".
Atos says it conducts around 17% of WCAs without the need for a face-to-face assessment, and that it does so " in line with the policy and guidelines laid down by the government".