The proposal for funding cuts left thousands of West Australians with nowhere to turn to for financial assistance, like Beechboro pensioner June Cunningham, who has used the service to manage her finances for more than 10 years.
The 74-year-old was concerned she would no longer be able to access financial counselling and joined the Opposition in condemning the decision.
After hosting private meetings with groups affected by the cuts last week, the Government decided to reinstate funding and is now looking to invest $1.8 million a year, which is still less than the previously allocated budget of $2.4 million.
Opposition community services spokeswoman Simone McGurk said the allocation was not enough to uphold an effective service, but was better than a total cut.
�Anything less than $2.4 million will be a slap in the face and shows this government doesn�t care about helping people in need,� she said.
�If the Government is really struggling to find money for these services, perhaps they should think about cutting their political advertising.�
Mental Health and Disability Services Minister Helen Morton said the reasoning behind the decision to reduce funding was that financial counselling was not the main concern of the Department of Child Protection and Family Support (CPFS).
�This will allow CPFS to make savings intended and continue its focus on its core business of protecting children,� Mrs Morton said.
The Government is now considering giving responsibility for financial counselling to the Department of Local Government and Communities.
�The Government is working with the financial counselling sector to help develop a revised metropolitan service delivery model that is efficient, integrated and sustainable,� she said.
But Ms Cunningham feared local governments would not be sympathetic to the cause.
Ms Morton hopes that shifting responsibility will enable the Department of Local Government and Communities to bring an across-government perspective to the issue.