Cutting the JobSeeker payment would plunge Australia into a national crisis, the federal government has been warned.
Anglicare has released a new survey showing how much people struggled to survive under the old Newstart rate, which has been temporarily doubled during the coronavirus crisis.
Two thirds of people who came to the charity for help before the pandemic were unemployed.
People would routinely skip meals and medications to stretch their Newstart payments as far as they could.
"Once people were on Newstart it really wasn't a new start at all," Anglicare executive director Kasy Chambers told AAP.
"They were going backwards from day one."
The release of the survey coincides with a national day of action to raise the welfare rate.
Australian Council of Social Service chief executive Cassandra Goldie wants the government to announce a permanent increase to the dole.
"We cannot turn back to the brutality of leaving people without paid work to try to get by on just $40 per day," Dr Goldie said.
"As we continue to deal with this health crisis, more people than ever before will struggle to find paid work."
The council pointed to a previous survey, which found seven in 10 single mums said their families were healthier and better fed thanks to the boosted JobSeeker.
Ms Chambers said the old rate of $40 per day was unsustainable and she would prefer the current level to remain.
But a compromise would be a $935 per fortnight payment, which is about $66 a day.
"That's the bare minimum," she said.
On July 23, the government will release its response to a review of coronavirus support payments.
Before the pandemic, one-in-two Anglicare clients had been using the agency for a year or more.
Just under half needed help to get basics like food or medication, while 40 per cent of people were supporting children.
More than one million Australian children live in households receiving JobSeeker.
In recent months, regular users were coming to Anglicare less, which Ms Chambers pinned partly on apprehension about coronavirus, but also the boosted JobSeeker payment.
"People are saying they haven't had to decide which of their medications they can afford each month," she said.
"One person said she hadn't eaten two-minute noodles since the new payment."
But Anglicare has been seeing some new faces as out-of-work households with bigger financial obligations battle to make ends meet.
"If you've got two kids and a rental house that was costing $550 a week, well it's still going to be difficult to meet that rent," Ms Chambers said.
© AAP 2020