It's billed as the biggest increase in the dole in a generation, but Tamworth charities are concerned a $25-a-week boost to the JobSeeker payment could drive more people into poverty.
Tamworth Uniting Church Reverend Simon Hansford said the new rate of $307 a week, up from $282 a week, is "way too low".
He said the rate - announced on Tuesday - would not be enough to sustain basic human dignity, and could even see people back on the poverty line.
"It will have an impact across the community, but certainly in the regional towns where resources are poorer, people are going to really battle. And winter is coming," he said.
"Welfare services like the church, like The Smith Family, like our missions, like Anglicare, Baptistcare like all of the other church groups are going to be stretched again.
"A lot of people who would normally volunteer in those spaces can't be working there because they're older. It's going to be very difficult."
On Tuesday, Prime Minister Scott Morrison announced the "base rate" of JobSeeker would rise to $44 a day. But unemployed people are currently receiving a payment worth about $50 a day, including a "coronavirus supplement" of $75 a week. The rate had been a high as $80 a day in mid-2020.
Tamworth Salvation Army Captain Harriet said the increase was a "very welcome start" but $44 a day is pretty tough to live on.
"Out of that $44 you've got to take your rental cost, your electricity and your gas cost," she said.
"People also require mobile phones. Mobile phone and internet access is not a luxury. Just to do business with the government and claim your Centrelink entitlements, you have to have internet to do so.
"We're still not in anything that any of us would describe as luxuries, these are the essentials of life."
On the other hand, she said the boost was big enough to reduce the number of people who would rely on the service for charitable help in Tamworth.
"This will make a difference for people. It's big enough to be more than a bandaid."
Federal MP Barnaby Joyce said the JobSeeker increase was "as much as we can afford".
"We are being more generous. We are not being as generous as you may like but I understand that there is a reason for that now. We are completely chock-a-block on the credit card," he said
"What changed [since January] is $1.7 trillion of gross debt, what changed is a massive $200 billion deficit when we were supposed to go into surplus," he said.
Unemployed Workers' Union spokesperson Kristin O'Connell said the announcement was "a cut and it's lie for the Prime Minister to refer to it as an increase."
She said the new rate would deny many people a regular meal, force others to abandon rental housing or mortgages, and force more to seek help at a food bank.
To the argument that government couldn't afford to help the poor, she said government should put helping people achieve the basics of life first.
"We don't say that we should only pay for Medicare if we can afford it. We make Medicare available to everyone because healthcare is important to everyone. In the same way food and having a safe place to live is not only important for everyone, but it's a right."