The clarification comes after the charity was criticised for announcing $61.5 million would be directed to bushfire relief, when currently funds raised since 2019 stand at $127 million.

Australian Red Cross chief executive Judy Slatyer said the additional funds were made possible by the generosity of the community and currently they were distributing $61.5 million directly at this time to assist the most vulnerable.

"We're allocating these funds based on our on-the-ground contact with affected communities, with those most impacted people being our immediate priority," she said in a statement.

"This is an unfolding disaster and tragically even more communities need support as bushfires continue right now and throughout this summer."

Ms Slatyer said a remaining balance of about $42.5 million will be used for further immediate relief and longer term bushfire support.

So far the organisation has allocated financial assistance including $5 million set aside and allocated for teams to be on the ground ready to respond to all disasters, an allocation of $7500 grants for people who were hospitalised as a result of the fires, with grants helping to cover out of pocket medical-related and other expenses.

The Red Cross have also allocated $50 million for emergency grants for lost homes, and an allocation of $10 million for home owners whose properties have been structurally damaged and require repair to make them safe for people to live in.

The Australian Red Cross defended its donation distribution saying the process takes time.

"Our experience in every disaster shows that new needs emerge over time," Ms Slatyer said.

"As these needs become apparent, we will continue to develop and release further assistance measures in consultation with the communities affected by these tragic bushfires."

Further announcements will be made as funds are allocated.