Warrnambool services have labelled a permanent rise in JobSeeker for the unemployed "bittersweet" as payments increase $50 a fortnight but last year's higher support tapers off.
It comes as two social services say they've seen an increase in people seeking assistance in 2021.
The federal government plans to increase the JobSeeker payment to a fortnightly $620 from the end of March, up from $565.
But a coronavirus supplement adding $150 a fortnight to the JobSeeker is due to end. The supplement currently gives single people without children $715 a fortnight.
In January 1738 people in Warrnambool were receiving JobSeeker, a drop from 1907 in December.
Warrnambool Salvation Army chief executive officer major Brett Allchin said the increase was a "good start" but "bittersweet" because the overall amount would decrease compared with last year.
"From our point of view it is a bit unknown whether it will increase or decrease the amount of people coming for assistance. It will be interesting how it affects those paying for rental properties," Mr Allchin said.
"People who can currently afford private rental may find the drop of income may restrict their options when it comes to choosing between food and housing."
He said the service's appointments had become fully booked this year, which wasn't the case last year during restrictions.
Mr Allchin said community support had also come to the fore during the pandemic.
"People who may have been invisible have become visible. The community is wonderful in helping each other," he said.
Warrnambool and District Food Share executive officer Dedy Friebe said there had been a 30 per cent jump in need for food hampers since January.
"That's an indication things are getting more dire out in the community and we're obviously gearing ourselves up to meet the need," Mr Friebe said.
"We are needing community support with grocery donations because the demand is so high at the moment. We are buying food as well so it shows the normal sustainability is being challenged."
WDEA chief executive officer Tom Scarborough said people seeking work through the agency peaked in October. But he said following a "record" number of placements in the months since, that number was now declining.
"Across the industries there seems to be more jobs available, and we are still hearing from employers who are struggling to find staff," Mr Scarborough said.
He said more people would likely seek casual work "to supplement their JobSeeker payment."
"It would be a little bit bittersweet dropping the JobSeeker. But it seems good the government has met everyone halfway and increased it a little bit," Mr Scarborough said.
He anticipated an end to JobKeeper at the end of March could lead to more people receiving the JobSeeker payment and needing assistance to find work.
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