The government re-announced funding for 10,000 extra home care packages for older Australians on Monday, against a 120,000 long waiting list.

Anglicare Australia executive director Kasy Chambers said the government shouldn't be "dribbling out" home care packages.

"Prioritisation of a surplus above services for older Australians is little comfort to those families who are literally dying on wait lists," Ms Chambers told media in Canberra on Monday.

She said the government needed to prioritise aged care in next year's May federal budget.

Monday's budget update outlined a total $624 million boost over four years, which formed part of the government's response to the aged care royal commission.

The money would also be put towards reducing the use of chemical restraints in aged care facilities and dementia training for staff.

As well, a survey would assess how many younger Australians are languishing in aged care facilities.

UnitingCare Australia national director Claerwen Little said the sector wanted a block of funding for regional and remote aged care homes.

But she also wanted a $10 per person, per day supplement for regional facilities.

"First Peoples are moving off country every day because they can't receive the care that they need in their own country," Ms Little said.

Leading Age Services Australia acting chief advocate Tim Hicks repeated warnings from the sector that smaller homes faced imminent closure.

"Over the next few months, providers are going to be asking themselves some hard questions," Mr Hicks said.

This included whether they could keep staff on, deliver a high quality service or where residents could be sent if they had to close.

He said a survey of members last year said 15 per cent would be forced to close by July if more money didn't come their way.

Health department data says there are nearly 200 aged care providers caring for up to 50,000 older Australians at high risk of financial collapse.

Australian Associated Press