Welfare recipients will still have to make do with the lowest unemployment payments in the developed world despite a $2.86 a day increase.
Subscribe now for unlimited access.
or signup to continue reading
An extra $40 per fortnight was set aside for JobSeeker, Austudy and Youth Allowance payments in the federal budget.
Despite the rise, single JobSeeker recipients with no kids will still have to survive on $52.36 per day, well below the poverty line of $87.32.
Australian Council of Social Service chief executive Cassandra Goldie says the increase to Centrelink payments fell well short of what is needed.
"It is certainly not enough for younger people who are facing extreme poverty and deprivation because of the inadequacy of these key income support payments," she told reporters on Wednesday.
"Going into this budget we had an unemployment payment that was, shamefully, the lowest of all of the OECD countries, despite us being one of the wealthiest countries in the world."
The government lowered eligibility for the higher rate of JobSeeker payments from 60 to 55-year-olds, meaning 52,000 Australians between 55 and 59 will receive an extra $92.10 per fortnight.
While it is a welcome development for vulnerable older Australians, younger people feel they are being left behind.
National Union of Students president Bailey Riley says a 15 per cent increase to rent assistance is inadequate, as rising housing costs and HECS debts weigh especially hard on young people.
"Young people across the country I've heard this morning are extremely disappointed," she said.
"Albanese promised us a better future for all, but young Australians are really asking now who is that better future for? Because it's definitely not for us."
The 20 to 30 cohort faces the greatest rate of homelessness, census data shows.
Other measures were better received, including a $3.5 billion commitment to fund bulk billing for children under 16 and concession card holders.
"The investment in Medicare to boost bulk-billed GP consultations as well as doubling medication available under one script will greatly help people on low incomes with chronic illness," Ms Goldie said.
Single parents are relieved extra payments won't be cut off when their child turns eight, reversing a decision made by the Gillard government.
Single Mothers Association chief executive Terese Edwards says she can smile for the first time in over a decade, as parents will continue to receive the extra $176.90 per fortnight until their child turns 14.
"I had a tear this morning when women were still phoning me and showing me pictures of what this will mean," she said.
"Women who started to dread a child's eighth birthday."
Ms Edwards also lauded the government for scrapping the "cruel" ParentsNext program, which sent parents to employment providers and required them to do training, education and parenting courses to maintain welfare.
Australian Associated Press
