Welfare groups are calling on Prime Minister Malcolm Turnbull and Opposition Leader Bill Shorten to keep a welfare payment which is slated for removal when Federal Parliament returns.

Key points: Party leaders urged to keep energy supplement by welfare groups

Party leaders urged to keep energy supplement by welfare groups More than 2 million welfare recipients to be affected

More than 2 million welfare recipients to be affected Supplement first real increase to some payments, ACOSS says

The removal of the so-called energy supplement for new welfare recipients will be included in a savings bill the Government is likely to put to Parliament next week.

The energy supplement was a payment first introduced as compensation for the carbon tax.

A coalition of welfare groups including the Australian Council of Social Service, National Welfare Rights Network and the Australian Youth Affairs Coalition have written letters to the leaders of both major parties urging them to retain the supplement.

Chief executive of ACOSS, Dr Cassandra Goldie, said the supplement was the first real increase to some welfare payments, including the Newstart Allowance, since 1994.

"This is the federal budget 2014 repeating itself, and we are urging the Prime Minister, the Leader of the Opposition, to give truth to their commitment to leave nobody behind," she said.

Dr Goldie said 2.2 million people would be affected by the removal of the supplement, including pensioners and Newstart recipients.

The letter sent to both party leaders said it would mean the loss of $4 a week for a person on a $38-a-day Newstart allowance.

For a pensioner, the carbon tax compensation is worth up to $8 a week.

"This isn't the right way for the Government to be pursuing a return to surplus," Dr Goldie said.

"The community widely has said it wants to see a fair approach to what the Government does with the budget, and going first to people on the lowest incomes to find savings is deeply unfair and is also very socially damaging."

Poor worse off without payment: Greens

The removal of the carbon tax compensation supplement for new recipients of government welfare payments is expected to save almost $1.4 billion.

In his 2016 budget announcement, Federal Treasurer Scott Morrison said those receiving the compensation would continue to do so but it was "nonsensical" for the Government to provide it to new welfare recipients.

"What we will be doing, going forward, is anyone coming onto benefits into the future, well we're not going to have carbon tax compensation for a carbon tax that doesn't exist," he said.

Dr Goldie said while the carbon tax was gone, the supplement remained an important element of welfare support.

"Even though the carbon price has been removed, if this energy supplement goes it will mean that people on the unemployment payment and others will be even worse off than they were when the energy supplement was introduced," she said.

The Greens have given their support saying there are better ways to balance the books than cutting payments to Australia's most vulnerable.

"In real terms, removing the energy supplement is a cut to an income support payment that desperately needs lifting," Greens community services spokeswoman Rachel Siewert said.

"The Newstart payment is dismally low and hasn't increased in real terms for years and years. A single person on Newstart receiving the maximum payment has to live on $37.40 a day. This is less than half the minimum wage," Senator Siewert said.

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