Jim Chalmers hints at higher JobSeeker payments for those over 55 years

While the Treasurer refused to confirm speculation that JobSeeker payments for those older than 55 years will be increased in the budget, he said the system already paid a different rate for people over 60 years "in recognition that it is harder to find a new job at that end of your working life".

"There'll be responsible cost-of-living relief in the budget, and it will focus on the most vulnerable people," Dr Chalmers told ABC radio. "There'll be a number of elements to it. It won't all be limited to one cohort or another."

The federal government has come under intense pressure to increase the JobSeeker payment, including from within its own ranks, over concerns the current $49.50 per day for singles is inadequate and condemns people to poverty.

The top-up payments would impact about 227,000 people.

In a report, 7 News also claims single parenting payments will be extended and rental assistance will be increased.

Dr Chalmers said there was always speculation in the lead-up to the budget, some of which "turns out to be accurate; some of that turns out to not be accurate".

There has been speculation the Treasurer may unveil a small surplus on budget night because a revenue windfall from soaring commodity prices and sustained high employment.

The latest update from Finance Minister Katy Gallagher shows that, as at March, the deficit was $11.2 billion - $23 billion smaller than had been expected.

READ MORE:

Commonwealth Bank economist Stephen Halmarick predicts the deficit will be revised down substantially to $5 billion, far below the $36.9 billion forecast in the October budget.

Mr Halmarick said the improvement in government finances was likely to persist into next financial year and said nominal growth was likely to be higher than had been expected.

The Treasurer admitted there would be "a substantial improvement this year because of a few things. Not just commodity prices but also lower unemployment and stronger wages growth."

But he warned that the numbers were "still bouncing around a bit [and] there are still a couple of decisions to finalise".

And Dr Chalmers said there was likely to be a deterioration in finances in the latter years of the budget outlook.

"Even with this quite substantial near-term improvement in the budget, the pressures on the budget in the third and fourth and subsequent years, are actually intensifying rather than easing," he said.