Beyond Housing chief executive Celia Adams said the government decision to cease paying the Equal Remuneration Order supplement would have a "disastrous" effect on the community's most vulnerable.

Last financial year Beyond Housing saw a 5.6 per cent increase in households seeking homelessness support and a 32 per cent increase in those needing help to obtain or sustain a private rental.

Ms Adams said now COVID supports had ended, they were expecting the number of people seeking help to grow exponentially.

"It's actually devastating," she said. "Staff are already feeling the pressure of an increased number of people accessing services, to know we might have to provide more services with less people...I'm truly gutted."

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In 2012, the Fair Work Commission made an Equal Remuneration Order to bring wages in the homelessness sector up to parity with comparable government employment and address the gender gap. Since then the federal government has provided ERO supplement funding and the industry award has been increased.

The government has not committed to paying the supplement in 2021-22, meaning from July funding will return to pre-ERO levels despite staff costs having increased.

Ms Adams said of their 60 staff about 50 per cent were funded under the homelessness classification. She doesn't know how many job losses will occur when funding ceases, but any staff reduction would hurt those in need.

"To have the federal funding cut now is brutal, at a time when our services are more in demand than ever, we lose critical funding to cover the fair wages of staff working to prevent and end homelessness," she said.

"We're in a pandemic that has greatly impacted our communities, particularly those in insecure housing. So why are we stripping back support when the need has never been greater?"

In Parliament, Homelessness Minister Michael Sukkar said the ERO supplement was always a temporary measure and highlighted other federal investments in the sector.

"Funding has not been cut, the funding as part of this agreement ceases," he said.

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