TASMANIA'S peak aged care organisation says the industry will suffer as a result of surprise cuts to dementia care funding.
Federal Assistant Minister for Social Services Mitch Field announced last month that the Commonwealth would cut the dementia and severe behaviours supplement from July 31.
The supplement saw aged care providers receive additional funding to care for each client with dementia.
Aged and Community Services Tasmania chief executive Darren Mathewson said the cut was a disaster in an industry that always operated on tight funds.
Mr Mathewson said caring for clients with dementia was highly resource-intensive.
"What we know at the moment is that more than half of those receiving aged care support are suffering some form of dementia and that is expected to increase," Mr Mathewson said.
"So that means additional resourcing, additional staffing and additional support for staff."
OneCare chief executive Michael Powell said the Tasmanian not-for-profit aged care organisation would lose hundreds of thousands of dollars a year under the cut.
"We have already put in place expenditure over some years, in order to meet the increasing needs of our dementia clients, based on the subsidy that we were receiving," Mr Powell said.
"It was announced on five weeks notice, which is horrendous. You can't even consider restructuring - restructuring involves at least six months of planning to try and absorb that cost."
In a statement, Mr Field said the supplement had not operated as anticipated, going well over the budget allocated by the previous government.
"The supplement was budgeted at $11.7 million for this financial year. Instead, it is anticipated the cost in 2013-14 will be around $110 million," he said.