The federal government has given the inquiry an extra six months to complete its work, as well as appointing former Federal Court judge Tony Pagone QC as the third royal commissioner.

Provider association Leading Age Services Australia CEO Sean Rooney said the extra time would allow for a deeper investigation of the many complex issues in aged care and their solutions, but critical issues facing the sector must be addressed now.

"We cannot delay action on making the aged care system better right now, by addressing the key issues of access to services, funding of services, quality of services and supporting the workforce that delivers these services," he said on Saturday.

Mr Rooney said providers were constrained by continued financial pressures.

"Many organisations are likely to reduce services, reduce staffing and/or reduce investment without funding relief," he said.

"Urgent action - before Christmas this year - is required to avert the increasing risk of service failures, job losses and missed care while the royal commission considers longer reforms."

Not-for-profit provider body Aged and Community Services Australia said the royal commission's extension would ensure broader discussions about big-picture solutions occurred, but new funding solutions were critical.

"There is good reason to feel optimistic about what can be achieved through the royal commission," ACSA CEO Patricia Sparrow said.

"But until we see adequate planning of the structural and funding issues, Australia won't be able to fully address the needs of older Australians, let alone address the future challenges of our ageing population."

Federal Labor also said the government must not use the inquiry's extension, from April to October next year, as an excuse to delay reform.

"The Liberals don't need the royal commission's final report to act on the things we know are wrong today," opposition ageing and seniors spokeswoman Julie Collins said.

Aged Care and Senior Australians Minister Richard Colbeck on Friday said aged care was front-and-centre of the government's agenda as one of its key priorities, adding it had continued to implement reforms while the commission progressed.

Advocacy groups want the government to immediately provide a dedicated funding stream for interim accommodation and support, with access to extended rehabilitation, to stop people under 65 with disabilities or medical conditions ending up in residential aged care.

"If we're serious about stopping this, we need that dedicated funding right now," Young People In Nursing Homes National Alliance director Bronwyn Morkham told the royal commission on Friday.

Australian Associated Press