In an emotional debate councillors voted 6-1 to bring down the curtain on its Home and Community Care service by October 31 in response to impending Commonwealth funding reforms.

The council currently provides a range of centre-based services, social services, in-home respite, and referral services for 281 service users and carers.

According to council staff the Albion Park HACC Centre employs six people, has five vacant positions and 46 volunteers.

A question mark also hangs over the future of community transport in Shellharbour City with the council voting to "transition out of direct service delivery" of community transport at the end of October.

On Tuesday night former Shellharbour councillor Don Briggs addressed councillors requesting the item be deferred saying "the council is fixing what is not even broken".

Mr Briggs said the staff's recommendation was being justified by the introduction of the National Insurance Disability Scheme, something that was still being refined and developed.

"The council is saying it will have difficulty, but so will every other care organisation in Australia ... they are all in the same boat," Mr Briggs said.

"A lot of elderly residents out there need help.

"Community transport is the pride of our fleet ... what sort of people are we that we can't help others."

Shellharbour mayor Marianne Saliba said while the council may be still holding out for the the NDIS "fine print", it was known there would be major changes to the sector.

"If we continue to operate this service as it is it will die a slow death," Cr Saliba said.

"If we don't act now we will have people who will find it more difficult to find employment and clients who will find it harder to find positions in other services.

"We are not able to compete with large not for profits or full profit organisations that provide these services.''

A report tabled at Tuesday night's meeting said the council was considered a small aged care and disability provider with an annual budget of less than $1.35 million.

Cr John Murray said when the services commenced they were very much needed and the council filled a gap that was no longer there.

"The government is changing the funding model ... they want to deal with big providers," Cr Murray said.

"I do note that some our clients who have money in their hands are voting with their feet."

Deputy mayor Paul Rankin said the council was being "forced into a corner" by the State and Federal governments.

Cr Kellie Marsh voted against the recommendation, saying the council appeared scared of a little competition.

"The services are needed, people feel comfortable and confident with our staff and excellent volunteers,'' Cr Marsh said.

"People won't get the service they get now with another organisation ... none of this is a dead certainty yet we are bringing the hammer down.

"Not all of these things will be taken up by another provider.

"Not only will jobs be lost over this, a lot of people will be left out in the cold and the vulnerable will be at risk because of our stupid decisions."