Church agencies say unemployed single people only get $244 a week and they are calling on the Government to set up an independent commission to determine the size of Newstart payments.
A National Centre for Economic Modelling report, commissioned by four churches on financial hardship in Australia, found that while the economy was prospering, those on unemployment benefits were falling behind.
The report found the Newstart allowance for a single person was 40 per cent of the minimum wage, and families relying on Newstart were five times more likely to be in poverty.
The head of Catholic Social Services, Paul O'Callaghan, says the Government needs better information about how much money people need.
"We'd like to see, for the first time in Australia, an assessment of adequacy done independently from either welfare agencies or officials, who are often tempted by trying to ensure that there isn't excessive spending by governments in any particular area," he said.
Mr O'Callaghan says the Government should establish an independent commission, similar to the Remuneration Tribunal which sets the pay rates of key Commonwealth offices including judges, MPs and chief executive officers, to determine an adequate base payment.
"At this stage there has been no serious work done on the question of what is an adequate base," he said.
Workplace Relations Minister Bill Shorten says the Government is doing other things, such as putting jobs agencies in disadvantaged areas, to make life easier for unemployed people.
"Our settings are that the Newstart allowance will stay where it is," he said.
"But I'm not going to stand here and say that I think life is easy for people on the Newstart allowance, because I don't believe it is."
A Senate committee is looking at the Newstart payment.
Some business and welfare groups want it increased by at least $50 to about $300 a week for single people.
"The best way to tackle unemployment and the debilitating effects of poverty is to give someone a good quality education, to give them skills so that they can find work and to be able to create an economic environment where jobs get created," Mr Shorten said.