Greens senator Rachel Siewert, who will introduce the plan to the Senate in Parliament's first sitting week in February, said: ''It's realistic and achievable and, if we're truly a caring society, we care for our most vulnerable.''

The Parliamentary Budget Office says the plan would cost about $7.4 billion between now and 2016-17.

The Greens say a separate plan - as yet uncosted by the budget office - to index Newstart, Abstudy and youth allowance in the same way as the pension, would bring the cost to $8 billion over four years.

Newstart and the other payments are indexed at a lower rate than the pension, leaving the payments progressively lower than the age and disability pensions.

The development comes after a week of debate about the adequacy of the dole, which more than 80,000 single parents - most of them women - were transferred onto from the higher parenting payment this week. Business groups, unions and the community sector have been calling for a rise to the $35-a-day dole for months, while Families Minister Jenny Macklin caused uproar this week by saying she could live on the benefit.

Senator Siewert, who spent a week living on the equivalent of the dole last year to highlight the challenges faced by people on the dole, said: "All the evidence, and my own small taste of the experience, shows that Newstart is too low, evidence the government tragically continues to ignore.''

This week Treasurer Wayne Swan and Health Minister Tanya Plibersek said that the government's priority was to get people into paid work.

Ms Plibersek said: ''I think that anyone would understand that it is hard to live on an income support payment, and that's why as a government we've increased the age pension, we've increased disability pension [and] we've increased carers' support, but Newstart allowance for unemployment is designed to be a temporary payment.''

But Senator Siewert said about 40 per cent of people who went onto the Newstart allowance remained on the payment after a year, with the other 60 per cent finding work.

While pressure is growing for an increase to the dole, senior government ministers have refused to comment this week about whether a rise is likely for the May budget. Business Council of Australia chief executive Jennifer Westacott has written and spoken in support of raising the dole, saying in August that ''entrenching people into poverty by expecting them to live on $35 a day is not a pathway back into employment''.

The Greens say the money could be found by toughening the mining tax and increasing the mining tax rate to 40 per cent.