Resthomes say they are not being paid enough to provide short-term care and some are moving away from doing it.
The Aged Care Association says there is growing demand from the elderly for respite care and it's undermining them.
The association says many district health boards pay resthomes and others less for respite care than for longer-term care.
It says there's strong support for respite care for older New Zealanders, but they often can't get beds where and when they need them.
Sprott House in Wellington says it gave up providing a dedicated respite care bed because of inadequate funding.
The Kapiti Retirement Trust says it incurred a loss last year because of respite care costs.
DHBs say three-quarters of them offer the same rate for respite care as for longer-term care, but it is up to individual boards to decide what they can pay in tough times.