Scott Morrison has been urged to follow former prime minister Bob Hawke's lead and focus on the country's most needy after data revealed one in eight Australian adults and one in six children are living in poverty.
The Australian Council of Social Service and UNSW joint study found 13.6 per cent of the population - or 3.24 million people - are estimated to be living below the poverty line after taking account of housing costs.
Of those, 774,000 children under 15 are living in poverty, the study published on Friday found.
ACOS chief executive Cassandra Goldie says it's wrong that poverty is entrenched in one of the wealthiest countries in the world.
Dr Goldie called on the government to raise welfare payments by at least $95 a week, invest in social housing and boost jobs growth.
"The number of people living beyond the poverty line is entrenched, it's persistent .... the economy is leaving far too many people behind," she said in Sydney on Friday.
Researchers warned Australia's poverty rate was worse than most wealthy countries including New Zealand, Germany and Ireland.
In Australia, the poverty line is considered to be $457 per week for a single adult, which is 50 per cent of the median income.
The average gap between the poverty line and people living in poverty was $282 per week.
The study found nine in 10 Youth Allowance recipients skipped meals and one in three quit studying because of a lack of funds.
Dr Goldie says people living below the poverty line are being forced to choose between eating or paying for medication.
The chief executive noted former Labor prime minister Bob Hawke made a commitment to end child poverty in Australia, and she called on Mr Morrison to do the same.
Mr Hawke reduced child poverty by 30 per cent, the ACOSS chief executive said.
"Where is the prime minister who is going to stand up in this country today and say I commit to ending the level of poverty in Australia?"
UNSW Professor Carla Treloar warned poverty will only increase without significant policy change.
"Who can stand up and accept that one in six children living in poverty is OK for modern wealthy Australia - it beggars belief," she said.
Mission Australia chief executive James Toomey said increased housing costs were pushing people into poverty and he called for an increase in Commonwealth Rent Assistance.
Good Shepherd chief executive Stella Avramopoulos says poverty disproportionately impacts women.
Single-parent families - 83 per cent of which are female-led - are the family type with the greatest experience of poverty.
Canberra has also been urged to ensure older people who are nearing retirement are not forced to live off their savings to survive.
Council on the Ageing Australia chief executive Ian Yates says older Australians are doing it tough and the age pension should be reviewed.
A spokesman for the Families and Social Services Minister Anne Ruston says jobless households are among those most at risk of income poverty.
"We understand that helping people out of poverty and increasing their self-reliance is a complex challenge, which is why government has to be willing to trial new initiatives to remove barriers to work and tackle disadvantage and intergenerational welfare dependence," the spokesman told AAP in a statement.
Australian Associated Press