So many people replying to don't understand what it's like to be in this situation.
My council had the same policy - so anyone aged over 50 could have a bungalow OVER disabled people. So not disabled and aged over 50, just over 50.
This policy was challenged by a local disability access group and the policy is now anyone with a high band due to mobility issue or over 50 which is fair. There were ridiculous situations of full time wheelchair users trapped in their unsuitable homes being left there while bungalows where available.
Also sheltered accommodation and bungalows are two separate things for those saying they are needed just for older people, plus many councils now allow younger disabled people into sheltered accommodation anyway.
There are so many reasons why a ground floor flat is unsuitable or much more difficult. It can be much harder to adapt a flat for wheelchair access, so those saying the council can adapt - yes, but only if it's physically possible. And it's not good saying your area has flats with their own entrances if the OPs area doesn't.
And why should the OP have to move out of area because of their disability? OP may have support in place in her own area that's needed. There are suitable properties in OPs area - they are just being denied access to them.
Most of the flats in my area are also blocks without their own entrances.
So I definitely think you should challenge that policy OP with your local MP as it worked in my area.