The latest ACT Council of Social Service cost of living report has found the cost of living in the nation's capital has risen for the fourth consecutive year; 12.7 per cent of Canberra's children live in households that earn 50 per cent or less of the median income.

As a national debate on income inequality again rears its head in the days before the federal budget is handed down, the report paints a stark picture of Canberrans delaying paying utility bills to keep up.

While 34,543 Canberrans were living below the poverty line, at 9.2 per cent, that was lower than the national average of 13.3 per cent.

But with average costs such as fuel, utilities and housing growing at a faster rate than national averages, council chief executive Susan Helyar said the gap between those on average to higher incomes and those on low incomes in Canberra kept growing.

Ms Helyar said many families were being forced to choose between eating, or heating their homes in the past year. Many households had been shocked at a 17.8 per cent rise in utility bills in the September quarter alone last year, above the national rise of 7.8 per cent.

"This was the largest single increase in one quarter since consumer price index records started being kept for this item in December 1989," the report reads.

"Water and sewerage prices increased by 8.3 per cent – this was well above the national rise of 3.2 per cent. Electricity prices increased by 10.6 per cent, which was below the rise seen across the
country (up 12.4 per cent)."

Ms Helyar said the council and its various members were hearing more stories of people forced to chose between "keeping a roof over their head, food on the table, buying medicine and turning on the heater".

She said this financial year the council was also hearing of energy bills in particular pushing more people into "hardship", with students and aged pensioners saying they simply would not turn heaters on this year to avoid the cost.

Ms Helyer said while the territory government needed to do more, she also understood all states and territories had been left to "carry the can" for successive federal governments refusing to raise the rate of income support such as Newstart.

The report said Newstart had not risen in real terms since 1994. A single person on the allowance took home $278 a week, $175 below the pension, and $1138 below the national median wage.

The council reiterated its calls for a $100 million funding pool for community housing provider-driven affordable housing in the ACT, and widening and raising concessions for low-income earners, among other proposals.

This year, it has also urged the territory government to create a program to ensure all private rental housing meets five-star energy ratings.

Desktop audits of such ratings in the territory have been plagued by inaccuracies and only 10 physical inspections were completed on site in 2016-17, though the government has defended its audit program and promised a further six physical inspections this year.

But Ms Helyer said it was "absolutely" in the government's control to set up a proper compliance regime and improve the energy ratings of private homes on the rental market.

"It's actually vital here because we have people in Canberra that are now going through below-zero conditions, without heating, in homes that can be so energy inefficient they can be as cold inside as outside," she said.

"It's very possible that the government can set up a regime that is credible, and it's vital that they do so."

The council, along with its national counterpart and social service bodies interstate, have been pushing for many years for the Commonwealth to increase income support payments, to no avail.