The Australian Council of Social Service is calling for a real increase to income support payments, arguing that routine indexation is simply not enough.
On January 1 each year income support payments including Youth Allowance and Austudy are adjusted for inflation.
ACOSS believes the federal government must deliver a significant real increase to Youth Allowance and JobSeeker rather than holding them at well-below poverty levels.
"The routine indexation of payments on January 1 does not deliver the real increase that so many people desperately need," said ACOSS CEO Cassandra Goldie.
"Income support payments were woefully inadequate before the prices of food, rent, medicines, energy and other essentials sky-rocketed and they will still be totally insufficient after indexation."
In the last twelve months, rents have risen by about 18 per cent, energy bills by about 20 per cent and food by about nine per cent. Rent assistance remains just $75.80 per week for a single adult.
Dr Goldie said working age income support payments should be lifted to at least $73 a day and rent assistance should be lifted by 50 per cent.
"Youth Allowance and Austudy payments are only indexed once a year and are even lower than other income supports," she said.
"Even with 6.1 per cent indexation, Youth Allowance will increase by $16.20 per week to $281.40 for a single person living away from home. That's just $40.20 a day.
"There are more than three million people living in poverty in Australia and this Christmas one in five of us were struggling to afford food.
"As one of the wealthiest countries on Earth, it is unconscionable that we continue to refuse to end poverty, but will proceed with billions in tax cuts for the wealthiest who already have more than enough.
"The federal government must take action to change this by lifting income support payments to at least $73 a day in the May Budget."
