Around 27,000 Australians are stuck abroad despite 20,000 empty plane seats coming into the country each week, a Senate inquiry has heard.
The Department of Foreign Affairs and Trade has been accused of telling stranded Australians to set up GoFundMe pages or directing them to homeless shelters, as people struggle to get home due to the caps on international arrivals.
DFAT has helped more than 27,000 people get home since the coronavirus outbreak, secretary Frances Adamson said.
Nearly 27,000 more Australians are registered as actively trying to get home, Ms Adamson said, 4000 who are classified as vulnerable.
However the number of Australians registered with SmartTraveller is around 35,000, the Department of Prime Minister and Cabinet said.
The national cabinet agreed last week to lift the caps from 4000 to 5500 in October.
Before the cap, up to 7000 Australians were flying home per week. However states requested the cap after Victoria - which was taking around a third of returned travellers - experienced an outbreak linked to its quarantine scheme.
Department of Prime Minister and Cabinet's deputy secretary of social policy Alison Frame said lifting the caps further would require the agreement of the states.
Deputy Secretary of economy and industry Simon Duggan said quarantine capacity, not the availability of commercial flights, was the biggest barrier in bringing Australians home.
"There's approximately 20,000 spare seats capacity coming into the country each week at the moment," he said.
First assistant secretary of the national security division, Lachlan Colquhoun said the Commonwealth could not run overflow quarantine medical facilities as it did not have the health workforce to staff them.
However Ms Frame said the Commonwealth was looking at whether the Australian Border Force or Australian Defence Force could be used in such a facility.
Home Affairs secretary Mike Pezzullo said creating a separate Commonwealth-run quarantine program was problematic though, as it created a separate "vortex" into states and territories against the wishes of local chief medical officers.
The inquiry heard harrowing tales of how Australian officials failed citizens stranded abroad during the pandemic.
Deanne Vowels who has been stranded in the UK with her husband and five children says she was told by consular staff to start a GoFundMe to pay for $70,000 in repatriation flights.
Airline officials also told her to send her five children home to Australia alone, as unaccompanied children were not counted in the caps.
Claire Burles tried to come home after her husband lost his job and they had to give up the lease on their home. The Australian Consulate instead gave her a list of homeless shelters.
Sarah Eifermann helped other Australians get out of Peru after the country went to martial law in March.
She helped organise anti-rejection medications for another stranded Australian who'd recently had a kidney transplant and only had 24 hours of medication left. The consulate did not help in this case.
Fiona Wright, whose flight out of India in March was cancelled and got trapped in the country's hard lockdown, said she'd been able to get very few details of flights out from consular staff.
While India had been organising empty flights into Australia to bring more than one million of its citizens home, Ms Wright was only able to learn of outgoing flights through Twitter.
She was not even aware DFAT had a list of vulnerable Australians needing emergency flights.
"I don't mind if there's people in front of me but I'd like to know where I am on the list," Ms Wright said.
DFAT said more than 800 applications for emergency loans had been made by stranded Australians.
The majority of applications had come from India, which also had the highest number of people stuck.