"But we do not want to see service providers forced to slash services due to the significant costs of these pay rises and we'll definitely need to see more assistance from the Federal Government," Ms Simpson said.
"The States cannot be expected to bear the majority of the financial burden themselves.
"Once the money arrives, there must be a sensible and fair distribution of the Federal funding designed to help compensate service providers for this."
Ms Simpson said there are growing concerns within the industry about the accountability and transparency in the funds distribution.
"I'm calling on the federal government to not only greatly increase its funding, but to also release how it will be assessed which organisations receive what funding."
Ms Simpson said the incorrect list which Community Services Minister Karen Struthers' department had supplied the Federal Government with last year was just one reason why there needed to be greater transparency in the allocation and distribution of any funding.
"The Queensland government greatly jeopardised the viability of many organisations because of its inability to do its job properly last year.
"We can't risk mistakes like this again. We need to make sure it gets to the organisations most affected to help them cope financially."
