Funding that has previously gone to the Yacaaba Centre at Nelson Bay, which for 25 years has offered counselling and homelessness services, is to be redirected to the Raymond Terrace Neighbourhood Centre under changes during the recent NSW Budget. It will effectively leave the Tomaree Peninsula with a gaping hole in the provision of social services according to Reverend Les Forester the ministry development officer for Paterson and Manning.

He said the "unintended threat" to the Yacaaba Centre coupled with cuts at the Nelson Bay Community Health Centre was a concern to ministers working on the peninsula.

"With the loss of psychologists and social workers from the community health centre in Nelson Bay, and now the threat to the Yacaaba Centre, the ability of those in need to access local assistance will be greatly reduced," Mr Forester said.

Hunter New England (HNE) Health's greater Newcastle cluster manager Derene Anderson said since February it had worked with non-government service providers to "transition" general counselling services to the primary healthcare sector.

As such, Ms Anderson said two HNE Health staff who previously provided general counselling in Nelson Bay had "finished".

"In recognition that the Nelson Bay . . . area had fewer alternative providers of counselling compared to other parts of Newcastle and the Hunter Valley, we have been in negotiations with a number of non-government providers to establish additional services on the peninsula," she said.

This will include a Lifeline councillor providing face-to-face consultations once a fortnight at the community health centre, which started on Wednesday. There are plans to increase the number of Lifeline counselling days in the future. HNE's changes come at the same time as funding to the Yacaaba Centre was redirected to the Raymond Terrace Neighbourhood Centre. While more money is available to the neighbourhood centre to address homelessness across Port Stephens, concern has been raised by Mr Forester and 12 other Tomaree Peninsula ministers as to how people will access help from Nelson Bay and surrounds.

"Other service providers ... based in Raymond Terrace will struggle to attract such broad community support as that received by the Yacaaba Centre," he said.

"While the government plan to use the Yacaaba premises to house a local homeless family is laudable, the loss of the Yacaaba service will have a harmful impact on our community."

Yacaaba Centre management committee chairwoman Sue Platcher said many letters of support were flowing in as it continued to look for avenues to survive.