Aged care providers are stepping up their campaign against a proposed billion-dollar cut to the sector, saying a similar reduction to the aged pension would see "riots in the streets."

Key points: Providers say budget cut to reduce funding by $6,655 per resident each year

Providers say budget cut to reduce funding by $6,655 per resident each year Over 500 providers say services like physiotherapy might have to be reduced

Over 500 providers say services like physiotherapy might have to be reduced Labor promises wide-ranging review of aged care system

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UnitingCare Australia commissioned a survey of 21 per cent of aged care providers to gauge the effect of the Government's plan to change the funding formula for aged care services.

The modelling by Ansell Strategic has found the budget cut would reduce funding by $6,655, or 11 per cent, per resident each year.

"The extent of these cuts are huge," UnitingCare Australia's Aged Care Network chair Steve Teulan said.

"If there had been a $6,500 reduction in the age care pension we would see riots in the streets."

He said some of the 501 providers surveyed reported they would have to reduce services like physiotherapy, and consider whether to accept residents with complex needs, if the changes went ahead from July this year.

"They would have to decide whether they would accept people or whether they believe the care which should be provided is better provided in hospitals," Mr Teulan said.

The Government first unveiled changes to the aged care funding formula in the mid-year budget update in December last year, and the latest budget decision expands on that process.

Funding model 'too complex': Health Minister

Health and Aged Care Minister Sussan Ley said funding to the sector would continue to grow, but that the changes were needed to address a projected blow-out of $3.8 billion in the cost of the payments.

"As economically responsible managers, we have to bring funding growth back to the budgeted trend over time," she said in a statement.

Mr Teulan said providers accepted the Government's costs must be carefully managed, but that a review was also needed of the true cost of providing care to older Australians.

"People do need to realise that people coming into residential aged care, their needs are increasing, as we have more people being supported in the community," he said.

"But it is still quite possible to develop sustainable models where both objectives; managing cost, and providing funding for decent care, can be achieved, and we would welcome the opportunity to work with the Government on that."

Ms Ley said she was concerned the funding model was "too complex", and that changes were needed to give greater certainty to providers and taxpayers.

She said if the Coalition won the election, the Government would consult with the sector on "potential, longer-term reform" to the funding system.

Labor has promised to conduct a wide-ranging review of the aged care system — including the funding model — if it wins this Saturday's election, but it has not promised to restoring the funding cuts.