The largest not-for-profit provider in Victoria and Tasmania has announced that it will close two of its high care residential facilities.

Uniting Aged Care said it had no alternative but to close the Bodalla facility in Kew and the Marivale facility in Ascot Vale because of inadequate federal funding.

The organisation’s Executive Director, Robyn Batten said the decision was made with “deep regret”.

But she added that the cost of building or upgrading high care facilities has grown at a faster rate than income.

“Under current Australian Government funding arrangements it is not possible to cover the costs of building and operating new stand alone high care residential aged care facilities,” Ms Batten said.

“That is, the funding is insufficient to provide care and to pay off the millions of dollars required to build a new facility.”

Both facilities have multi-bed rooms and as a result, have experienced low occupancy rates for a number of years.

The organisation will assign a staff member to each of the 105 affected residents to act as a point of reference and to provide general support. It will also help with moving residents’ belongings where needed.

No date has been set for the closure but a Uniting Aged Care statement said it was “probable” that a new home will have been found for all residents within three months.

Ms Batten said the closures were a classic example of the crisis in the sector.

“Over the past few years the physical features in older style facilities have not been able to meet current expectations of the community; most people seek single rooms with ensuite bathrooms,” she said.

“Consequently to bring the facility up to modern standards it would be necessary to demolish the building and build a completely new facility; this would also necessitate its closure.”

The announcement comes after Ms Batten told a Senate Inquiry hearing in March that residential aged care facilities were becoming increasingly unaffordable.

“We have closed two facilities in Victoria because we cannot replace them,” she said at the time.

“They are facilities that are not meeting current community expectations and we cannot rebuild them and be financially sustainable. And we are planning to close a further one in the coming year.”

Ms Batten told the inquiry that the organisation plans instead to build more independent living units where people can age in place.