As Scott Morrison prepared to step in as Social Services Minister, his new department was contacting housing advocacy groups and other community services providers on Monday to inform them their funding had been cut and contracts with the Commonwealth would be discontinued.

Social Services posted letters responding to requests for grants from the community sector for ongoing and new funding streams after a process first announced in March.

New Social Services Minister Scott Morrison. Credit:Alex Ellinghausen

The government has previously warned it could satisfy just $800 million of the $3.9 billion in grants requested by the sector.

Fairfax Media has learned that all funding to Financial Counselling Australia has been cut, while a number of other community services groups providing emergency accommodation relief lose their funding.