The dire prediction comes as the ACT government rejected Lifeline's plea to more than double funds in next week's budget.

While Mr Zissler says shutting down Lifeline altogether in Canberra is ''highly unlikely'', he cannot rule it out.

''If we run out of funding and can't generate enough wealth to run Lifeline Canberra, ultimately you'd have to consider closing the business,'' he said.

Mr Zissler has also raised the possibility of more redundancies after cutting three positions last month.

Lifeline had asked the ACT government for a funding increase of more than 100 per cent in Tuesday's budget to $450,000 a year, up from $206,000 a year.

However, Treasurer and Community Services Minister Andrew Barr said funding will increase by 3 per cent.

''This will provide funding certainty for the coming year,'' Mr Barr said. ''They are also encouraged to apply for additional infrastructure or program funding through the various community sector grants programs on offer during 2013-14.''

When informed of this outcome by The Canberra Times, Mr Zissler said he was ''very disappointed''.

''We've been working with the government and they understand we're under pressure and we had expected more,'' he said.

Mr Barr said Lifeline was a valued and trusted service. It received ''considerable support from the community, evidenced by the donations it receives and the interest in its book fairs''.

''[The] commercial ventures it has started recently are aimed at boosting revenue - I welcome Lifeline's proactive and forward thinking on this,'' Mr Barr said.

Mr Zissler believed extra funding should not be out of the question, given the bare bones delivery of the counselling service was $450,000 a year, excluding

training of the volunteer counsellors.

''We think that's not an unreasonable ask of government to fund that bit, given that 10 years ago that's what they agreed to fund but over time demand has grown, we've grown, the need for volunteers has grown and we've out-stretched that,'' he said.

''Fundamentally, they haven't increased their commitment over time and we understand that but it's probably time for them to step up to the plate.''

While government funding was tight, Mr Zissler said there were also fewer donations being made.

''I wouldn't like to say it's a unique problem to Canberra, but I think the reality is particularly in Canberra we have a crunch on donations,'' he said.

Mr Zissler said he would be reviewing the service's finances at the end of the calendar year to see how it was travelling for early next year. ''The reality is February, March, April next year looks very, very tight and very challenging,'' he said.

''We'll then go out to the community and the government to see what we can do. Whether we need more restructures, I'm not sure,'' he said.

Lifeline Canberra cut three positions last month to save $200,000 a year. ''You can't be living beyond your means,'' he said. ''Given salaries for staff are a significant portion of our budget, you'd probably look at redundancies.''

If Lifeline Canberra did close, it would mean a loss of local counsellors to answer local calls, which were directed to the Canberra call centre through the exchange. The calls would go into a national pool, putting more pressure on the system.

Mr Zissler said people could help Lifeline through donations, becoming a volunteer, supporting its businesses and attending its vintage ball at the Hyatt Hotel on July 27.