Their comments come as the Australia Institute calls for an increase in the unemployment benefit in the order of $200 a week, just to get back to the poverty line.

In a submission to the Senate inquiry into Newstart, Dr Francis Markham and Professor Jon Altman said Indigenous people were hardest hit. One in every five people on Youth Allowance and one in 10 people on Newstart was Indigenous, they said.

The payment left them living in "deep poverty" and the consequences were profound, the pair said. Between one-third and half of life expectancy gap between Indigenous and non-Indigenous in the Northern Territory was due to poverty.

"The simplest way to reduce poverty in remote Indigenous Australia is to raise the rate of Newstart," Dr Markham and Prof Altman said. "It is not hyperbolic, but merely a restatement of the epidemiological evidence to point out that the current rate of Newstart is killing Indigenous Australians."

Newstart was not a "transitional payment" but the long-term destination for many unemployed Indigenous people, the pair said.

While the payment was just $279 a week, the reality was worse than the figure suggested, because many people on Newstart were docked payments or quit the system altogether because of the punitive requirements, they said.

People in remote communities had to do a far more onerous version of work for the dole than others on Newstart, which required them to start work for the dole immediately instead of after a year, and do 20 hours a week with no flexibility. The result was an extraordinarily high rate of penalties. People on the remote communities program were penalised an average of five times each in 2016, compared with 0.9 for others on Newstart.

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Dr Markham and Prof Altman called for an overhaul of the system, saying the old CDEP program was "far more comfortable in income terms than life coping with Newstart".

The policy had shifted from "help" to "hassle", effectively punishing the poor.

In its submission, the Australia Institute said while the government claimed Newstart as a temporary payment between jobs, the average time people were on Newstart was three years. An unemployment rate of 5 per cent was now built into Australia's economic system as the government's target "natural rate of unemployment", dooming large numbers to unemployment and a target at odds with the government's rhetoric about getting people back into work.

"711,000 people and their dependants are the victims of this policy and are presently doomed to live a pale imitation of the lives the majority of Australians enjoy," the Australia Institute said.

Bringing Newstart up to parity with the aged pension and fixing it at 25 per cent of average weekly male earnings, would mean an increase of almost $180 a week, the group said.