PEOPLE living on the Newstart allowance in Tamworth are being forced into poverty, homelessness support services claim.
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This year's federal budget pledged no funding towards increasing the fortnightly welfare payment doled-out to unemployed job-seekers.
It has left some in support services concerned people will be entrenched further into disadvantage.
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Tamworth Family Support Service homelessness manager Tanya Rogers said it was a disappointing budget for the community's most vulnerable.
Currently, the maximum amount a single, childless person can receive on Newstart is $555.70 a fortnight.
It's an amount which doesn't stretch very far, even in a regional city.
"Often people are paying more than 35 per cent of their income in housing costs and that doesn't leave for much for the basic essentials if they're paying $200-a-week in rent," Ms Rogers said.
"That has to cover electricity and food.
"They say electricity prices are going to fall, but they're not going to fall quickly."
She said Newstart was forcing people into poverty and there was not a lot of understanding in the community about the issues faced by unemployed and homeless people.
"It can be hard to even be compliant," she said.
"The further west you go, the more difficulties you get with people who might not be able to afford transport to get to job-seeker appointments or getting cut off from benefits because they have no fixed address, so they can't receive a letter."
The St Vincent de Paul Society national president, Claire Victory, also said the budget had failed the vulnerable.
"The continuing refusal to address the low level of support for people on Newstart is harsh," she said.
"The government's 'commitment to fairness' does not deliver one cent of the one-off energy assistance cash payment to Newstart recipients."
Prime Minister Scott Morrison said "people on Newstart aren't intended to be there for a long period of time and they also have access to a range of other income support payments."