Sunshine-based Mercy Western Palliative Care has received more than $500,000 and Western Health $100,000 as part of an $8.6 million state government spending package.

Health Minister David Davis said the extra funding meant thousands more people would receive help and support in their time of need.

The $522,325 for Mercy Western Palliative Care will boost the number of people it can help stay in the community.

The extra $100,000 for Western Health will help it meet increased demand for consultancy by palliative-care teams working in hospitals and the community, and provide clinical assessment and advice.

One in two Victorians suffer a period of chronic illness before dying, and the need for palliative care is growing by 4.6 per cent each year.

Mercy Palliative Care manager Fran Gore said the extra funding was critical to managing increased demand in Melbourne's west.

"Over the past four years, referrals to our community program have risen from about 900 to 1400 per year," she said.

A further $74,995 will be used to support carers with their costs.

"Carers carry great financial and emotional burdens, and this funding will give more carers much needed respite in what will be one of the most difficult times in their life," Ms Gore said.

The funding will help provide equipment to assist palliative-care patients stay in their own homes and meet high medication costs.

-Benjamin Millar