The charity recently reapplied for a five-year grant from the federal government, for which it previously received $335,000 a year to go towards helping people in financial crisis across the Canberra and southern and western NSW regions.

In mid-November Vinnies was told by the Department of Social Services it would only receive $253,776 for each year, a 25 per cent cut on the levels previously provided.

After lobbying the department, Vinnies was told transitional funding of $81,957 would be provided to the organisation for the 2019 calendar year. Vinnies chief executive Barnie van Wyk wrote again to the department, receiving confirmation about the lower funding level for future years on Friday.

"We cannot reduce the amount of relief we provide to people who call on us for help in times of  crisis, and the effect of this cut will place an enormous strain on the organisation and the services we provide as we expect the number of people calling for help to increase even more," Warwick Fulton, St Vincent de Paul president for Canberra-Goulburn, said.

A spokesman from the Department of Social Services maintained that the total amount to be spread across the ACT and capital region was to be maintained at $847,443 a year, but that other organisations would received a larger share of the grant funding than previously.

The other organisations providing assistance include Anglicare, the Salvation Army, Migrant and Refugee Settlement Services of the ACT, Southern Youth and Family Services, Communities@Work and the YWCA.

Mr Fulton said he was glad that the level of funding would stay at the same level across the region, but he is concerned about the possible disruption to the level of help people receive and whether the new funding arrangements would properly service country towns across NSW.

After The Canberra Times contacted Social Services Minister Paul Fletcher's office on Tuesday, Mr Fulton was contacted by a staff member in the office, leaving him feeling more optimistic about the future funding arrangements.

"I don't have a problem with [more organisations providing services] in principle, provided that service is still going to be provided to the people in need. We cover quite a few country towns and I've asked the minister's office 'can you guarantee me that these extra service providers are going to be able to provide service in these towns?'" Mr Fulton said.

"That funding goes to basically put food on the table for families that are desperate and to pay their bills that are causing them stress and that sort of thing. So we will have to either provide less help or if we're going to provide the same amount of help we were providing previously we'll have to cut back somewhere else."

"Before we need to make those calls we need to be comfortable that someone else is going to pick up the service in the places where we're already providing that service."

Mr Fulton said the minister's office had committed to providing extra information to Vinnies about how services would be provided.

"I'm pleased that we have a positive response from the minister's office and we're working to find a resolution to this matter so the people we serve aren't disadvantaged," Mr Fulton said.

"If we get a resolution that looks after the people in need then I'm happy."

Labor MP for Fenner in Canberra's north, Andrew Leigh, blasted the government's decision.

"The government has badly bungled this. This is the same incompetent mishandling that saw Scott Morrison forced to backflip on funding cuts to Foodbank last month," Dr Leigh said.

"When I held a fundraiser for St Vincent de Paul earlier this month, I learnt that Vinnies provided help to 14,500 people in Canberra and Goulburn last year, including thousands of food hampers. This is vital work, but thanks to the Liberals there is widespread confusion about who has been funded, for what services and for what area."