Rural Alive & Well has had $15,000 of annual funding cut, which it has used to provide suicide prevention and mental health support services on Flinders Island.
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State Health Department deputy secretary planning, purchasing and performance Ross Smith said funding for mental health services on Finders Island - provided through TAZREACH - had not decreased overall.
"Based on the recommendations of an expert clinical panel and consultation with the local community, the decision was made in April this year to provide funding for other comprehensive, integrated mental health services for Flinders Island that attend the island on a more regular basis," he said.
IN OTHER NEWS:
"The number of days per annum of available psychology services [on Flinders Island] has in fact increased.
"TAZREACH has offered to work with RAW to help transition clients to appropriate free mental health services on the island."
The TAZREACH program has provided $15,840 per year to RAW since 2015, covering travel costs for sending outreach workers to the island.
"RAW has made a significant contribution to making Tasmania the only state in Australia that has a lower rural than metropolitan suicide rate," RAW chief executive Liz Little said.
"TAZREACH's decision not to fund RAW's travel to the island ... leaves Flinders Island without local access to a suicide prevention service they clearly trust and use."
Labor health spokeswoman Sarah Lovell said Health Minister Michael Ferguson "must now explain to residents on Flinders Island ... where they are now supposed to go for help".