A new survey from the Australian Council of Social Services (ACOSS) has revealed a growing trend of people on JobSeeker, Youth Allowance and other Centrelink payments were forced to make difficult living cost decisions.

St Vincent de Paul Victoria north-west central council president Chris Pye said the stories were also common among Vinnies' service users in the south-west.

"There's no doubt from a practical sense that what people are responding to (in the survey) is in fact happening," he said.

"If you're concerned about having a roof over your head, you are going to cut back on food."

Mr Pye said there had been a sharp uptick in demand for Vinnies services in the region, attributing it to rising living pressures during the winter period.

"In two months, there's been a 16 per cent increase across the north-west central council that I look after which is from Mildura down to Warrnambool and across to Apollo Bay," he said.

"In light of all the increases, whether it's fuel, energy costs, rentals... cost of living is having a huge impact."

But he said it was already an issue after the federal government's coronavirus supplement, which saw the JobSeeker payment rise to around $79 per day, was stopped.

"During COVID, people received additional payments and that was one group of Centrelink recipients that we didn't see much of at all," he said.

"But now they're coming thick and fast."

He said the increased JobSeeker rate seen at the peak of the pandemic should become permanent.

"It's a no brainer," he said.

"With that additional income... we saw very few people from the Jobseeker area (rely on Vinnies services)."

According to the ACOSS survey, there were frequent "dire" testimonies of welfare recipients skipping meals to pay rent or put food on the table for their families.

"I can barely afford to buy 500 grams of mince, two loaves of bread and if I am very lucky might be able to buy some jam to put on it," a survey participant on JobSeeker said.

"I still am skipping meals and it is certainly not doing my health any good."

Meanwhile a single-parent payment recipient said: "When I need to pay a utility bill, the only groceries we purchase are bread and milk that fortnight."

Salvation Army Victoria public relations secretary Major Warren Elliott said these cases did not surprise him.

"It's an ongoing thing we've been seeing the last couple of years with COVID and a lot of the pressures on people, it's an expected result," he said.

"Those stories are not in isolation in those reports. There are people in the region experiencing that everyday."

Mr Elliot said Salvos were also experiencing a demand for its assistance "above pre-COVID levels", particularly among older groups, and called for a rise in Centrelink payments.

"It's all across the board, but over the last couple of years we're certainly noticing more of the older cohort," he said.

"It's (JobSeeker) not keeping pace with the cost of living."

He said he'd like the government to address the mental health crisis which he linked closely to cost-of-living pressures.

"Mental health issues (are) number one, across the country, of people's concerns that we'd like to see more in terms of government action," he said.

"We certainly see the outcomes and the pressures that (rising living costs) are bringing into people's lives."

IN OTHER NEWS

Warrnambool Bethany Community Support executive manager Sharlene Gillick said accounts similar to ACOSS' survey of people compromising their health from stretching out medication and foregoing medical treatment due to unaffordable costs had caused an influx of first-time service users.

"We're actually seeing people seeking out support financially like this that have never had to before," she said.

"We've even had some medical expenses that we've paid for people."

Ms Gillick said the financial stress was causing people to become both physically and mentally "vulnerable".

"It's impacting on so many levels," she said.

"Financial distress correlates with poor mental health outcomes with relationship stresses and increases in addictive behaviours."

She said Bethany had seen more requests for mental health and counselling services, calling for more funding in the area on top of welfare payment increases.

"We're seeing an increase in demand for counselling," she said.

"There's a long waitlist for lots of services and there's not as many services."

The ACOSS survey also detailed stories of people in the regions feeling the pinch from inadequate income supports.

"I am not able to buy fuel for my car to get to job interviews as I live in (a regional town) and am unable to get to (another regional town) for job interviews as there is not much work to apply for in (the town where I live)," a regional JobSeeker recipient said.

"Sometimes I put off getting medications so I can pay the gas bill."

Victorian Council of Social Services (VCOSS) chief executive officer Emma King said low welfare rates impacted people in rural and regional areas more severely than city residents.

"It's catastrophic," she said.

"We found that people were going to bed all day because they couldn't afford to turn their heater on.

"We know a lot of people do things like (going) to their local library or... shopping centre in summer because there's cooling which they may not have at home."

Ms King said rising rent and fuel costs were particularly tough for people on payments like JobSeeker in the regions.

"These issues are particularly pronounced in regional areas," she said.

"Depending on what services are around as well... the cost of being able to go to services will be greater.

"I would guess there's very few of any rentals in Warrnambool or in the outskirts that would be affordable for someone on JobSeeker."

According to the ACOSS survey, 96 per cent of respondents were under rental stress - defined as using more than 30 per cent of their income on housing.

Ms King said she anticipated this would become even more pronounced in regional Victoria due to the migration of people from capital cities.

"There's a greater shift of people wanting to enjoy regional Victoria, but it's driven the costs (of housing) up," she said.

"For low income people, that either puts them in severe mental stress or pushes them out of town."

Prime Minister Anthony Albanese has ruled out a welfare rate lift in October's budget indicating the JobSeeker payment had increased to account for inflation from $46 to $48 per day.

VCOSS' Emma King said it was "impossible" for people to survive on this amount given the sky-rocketing living costs and joined ACOSS' calls for an income support payment rise to at least $73 a day.

"There are thousands of Victorians who have got energy bills that are around $1600 or $1700," she said.

"They've got no capacity whatsoever to pay that off on JobSeeker."

Ms King said the low JobSeeker rate was already an issue before the pandemic and would only worsen with rising inflation.

"People want jobs if they're able to have them by and large so, of course, we want that," she said.

"But at the same time, we've got to have a safety net.

"At the moment we've got JobSeeker, but it's not a true safety net... it actually consigns people to poverty."

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content:

Now just one tap with our new app: Digital subscribers now have the convenience of faster news, right at your fingertips with The Standard:

Have you signed up to The Standard's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in the south-west.