Religious aged care providers are fighting for their right to turn away older gay people as proposed laws look likely to strip their religious exemptions this year.

Faith-based aged care facilities will have to bite the bullet and allow LGBTI people into their residential communities or risk losing millions of dollars in government funding if the current draft anti-discrimination bill goes ahead.

More than 3,000 submissions were received last month in response to the draft of the Human Rights and Anti-Discrimination Bill 2012.

The bill includes protections for sexual orientation and gender and sex diversity for the first time in federal law. But it also includes the more controversial decision to remove religious exemptions from Commonwealth-funded aged care services.

Anglicare Sydney, the community care organisation of the Sydney Anglican Church, has defended its “fundamental freedoms of religion and association” by calling on the federal government to keep the religious exception in place until further consultation.

Anglicare’s residential aged care arm, Chesalon Care, depends on Commonwealth subsidies to cover more than half of its annual operating costs.

In the 2011-12 financial year, Chesalon Care received almost $25 million from the Commonwealth to care for older Australians, equating to about two-thirds of its outgoing costs.

In their submission, Anglicare wrote that the new laws would lead to conflicts in aged care residential communities.

“Our view is that religious organisations should be given the opportunity to outline how they believe such discrimination is justified or otherwise in the light of the fundamental freedoms or religion and association,” the submission said.

“Once a person or couples are accepted into such a community, there is the potential for conflict where the person or couples are in fundamental disagreement with the religious ethos of the service provider or where the service provider has objections to the lifestyle or behaviours of the new resident(s).”

As part of wider government reforms for seniors, it was revealed older same-sex couples faced discrimination from aged care services run by religious organisations, especially when they wanted to be recognised as a couple.

Almost one third of Australian residential care services were run by religious organisations in 2009, according to the Australian Institute of Health and Welfare.

Australia’s largest organisation representing over-50s, National Seniors Australia, has backed the proposed law change for aged care providers and said the LGBTI discrimination was “inappropriate”.

“National Seniors believes that it is critical that the age care industry not only protects its clients from discrimination based on gender identification and sexual orientation but also amend its policies and practises to better accommodate these individuals’ living preferences,” it wrote in a submission to the Senate Committee.

The Australian Psychological Society has also supported removing the exemption for government-funded aged care facilities, along with various LGBTI rights lobby groups.

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