Canberra community sector groups say the planned Christmas cut to the coronavirus supplement is cruel and crushing, as unemployment hits a new high.
The ACT Council of Social Service CEO Emma Campbell said almost 23,000 people in the ACT were currently receiving income support payments that had been boosted by the supplement.
The rate of people receiving income support in the ACT more than doubled during the pandemic, the highest increase in the country.
The $550 coronavirus supplement saw poverty rates decrease significantly across the ACT.
But when the rate was reduced by $300 per fortnight in late September 2020 (to $250 per fortnight), poverty rates increased to a level significantly higher than the pre-COVID-19 levels, Dr Campbell said.
It is estimated there are now about 38,000 people living in poverty in the ACT.
Dr Campbell said there needed to be a permanent and adequate increase to the rate of JobSeeker, Youth Allowance and other income support payments to prevent more people being forced into poverty.
"The coronavirus supplement has played a critical role in supporting the ACT community and our economy during the COVID-19 pandemic," Dr Campbell said.
The income support will be cut by a another $100 a fortnight at the end of the year.
Mr Campbell said it was a cruel and damaging mistake that will come as a crushing blow to millions.
The latest employment figures released on Thursday showed the country's unemployment rate increased from 6.9 to 7 per cent last month.
It came as a result of more people returning to the labour market.
However the number of employed people grew in October by 178,800.
It was a more upbeat result than expected, with economists predicting a fall of about 30,000 people.