37,000 live off less than $500 a week in Canberra

In the wake of last month's federal budget, the latest ACT Council of Social Service snapshot paints a stark picture of low income families shivering through winters with the heating off to keep up with the capital's rising cost of living.

About 37,000 people, including 8000 children, come from households living off less than $500 a week. Close to eight per cent of Canberrans are scraping by below the national poverty line of $433, though that number still sits beneath the Australian average.

And, for the third year in a row, Canberra's Consumer Price Index (CPI), often used as a cost of living measure, has grown faster than the national rate.

While Australian inflation remains relatively flat, council director Susan Helyar said the cost of essentials such as energy and fuel continued to climb.

Canberra rent prices have now overtaken Sydney to top the nation and in the past decade, the cost of fuel in the capital has surged by 30 per cent - the highest rate in the country.

"So it might be cheaper to buy a car or a TV, but the basics are all going up," Ms Helyar said. "The cumulative impact of this is really starting to bite."

Too often, people were making heartbreaking choices in order to keep a roof over their heads, she said.

"We particularly hear of single parents going without food so their children can eat."

As of December, more than 10,000 Canberrans were receiving Newstart or another welfare payment such as Youth Allowance.

In a city of university graduates with above average incomes, Ms Helyar said Canberrans faced a particularly difficult climb out of unemployment.

"It's a really hard labour market to break into. Even in the less skilled jobs, we have 30,000 students in the city looking for that kind of work, they're smart, they're young, they're hard to compete with for someone who's [long-term] unemployed."

While last year's report found close to 35,000 Canberrans were below the poverty line, Ms Helyar said the latest figure reflected an improved measurement rather than a reduction in disadvantage.

Teaming up with UNSW, the national council of social service examined household size as well as weekly income to more accurately determine who fell below the line.

"But we're seeing increased demand [for services] not less, particularly around food security," Ms Helyar said.

The council is calling for the ACT's new affordable housing strategy to be introduced as a "matter of urgency" along with more financial literacy support, an expansion of the concession scheme and the introduction of income-based fines.

"A $300 speeding fine is meant to be a deterrent, not [devastating] for families," Ms Helyar said.

The Newstart payment, designed for those seeking work, has not increased in real terms for 25 years, she added.

The national council is now leading the push to raise the payment by $75 a week but the Coalition argues Newstart is a transitional support, not a long-term solution.

Despite the fanfare over a surplus in the last month's federal budget, only a one-off $75 energy supplement was offered to welfare recipients.

"You can't live off $40 a day," Ms Helyar said flatly.

"Some social policy interventions are complicated, I'll admit, but some of them aren't."

Last year, ACT Chief Minister Andrew Barr became the first state or territory leader to call for a Newstart increase.

Raising the payment by $75 a week would create 12,000 jobs across Australia and increase wages by 0.2 per cent, a Deloitte report found in September. Canberra was also singled out as one of 20 areas across the country to benefit most from a rise.

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