A specialist legal centre that helps welfare recipients challenge robodebts and make payment claims to Centrelink fears for its future amid suggestions the New South Wales government has cut its funding.

Katharine Boyle, the principal solicitor at the Welfare Rights Centre, told Guardian Australia a funding shake-up meant the organisation was facing a financial shortfall of $55,000. That amounted to 10% of its overall funding from commonwealth and state governments.

Overall, the NSW government has boosted funding to the community legal sector by $1.86m, with the extra money helping to create new programs to help seniors in the Hunter and central coast regions, north of Sydney, as well as a legal service for migrant workers experiencing employment exploitation across the state.

But some organisations, including the Welfare Rights Centre, suffered a reduction in funding in the tender process, according to analysis by the peak body, Community Legal Centres NSW (CLC NSW).

Boyle said she was now “worried for the future of the centre and our ability to help our vulnerable clients”.

The centre helps about 2,500 people each year with information, legal advice and “direct advocacy to Centrelink” and appeals at the administrative appeals tribunal.

Some payment claims, such as for the disability support pension, are incredibly complex, while other vulnerable people, who may be homeless or in financial distress, can also find it difficult to successfully apply for Newstart or other income support.

The difficulty Centrelink recipients face in gaining access to payment was highlighted by the case of John, a Melbourne man who died of cancer while waiting for the disability pension.

Boyle said the centre may be able to absorb the changes in 2019-20, but “going forward, the impact will become more severe”.

“I’ll have to look at redundancies which will further scale back our service,” she said. “[Clients] will have to wait longer for an appointment with us, which can have a really severe impact for people who are without a payment.

“Generally people are [already] saying they can’t get through [to the helpline],” she added. “When they do get through people are generally booked up for six weeks in advance with appointments.”

CLC NSW welcomed the overall boost to legal community funding in the state, but warned some vulnerable communities were set to lose out from the funding shake-up.

The CLC NSW says while overall funding increased to the sector, 10 centres will lose $671,582 compared with their 2018-19 income.

“If additional resources cannot be found from the NSW government or other sources, these funding reallocations will have an impact on particular vulnerable communities in NSW,” the CLC NSW chair, Katrina Ironside, told Guardian Australia.

“Centres that have received less funding include centres specialising in social security payments and the delivery of services to people with disability and Aboriginal women experiencing domestic and family violence.”

The NSW attorney general, Mark Speakman, said community legal centre funding was at record levels and had “increased 85% since 2015-16”.

He said the government ran a “competitive tender process which has provided the sector with never-before-seen funding security”.

“Applications were assessed by an expert independent panel against a known criteria that emphasised helping people with the greatest legal need and services that provided value for taxpayer’s money,” Speakman said. “I accepted almost all of the recommendations of the panel.”

The NSW government had also maintained funding levels for free legal services for the vulnerable after a threatened commonwealth cut in 2016-17, Speakman added.

“Funding for the Welfare Rights Centre has more than doubled compared with 2016-17 levels.”