Australia's peak welfare body says the nation is facing a housing crisis with agencies unable to cope with demand.

The Australian Council of Social Service (ACOSS) has released its annual survey of more than 500 community agencies showing that housing availability and affordability is the greatest unmet need for its welfare clients.

Dr Tessa Boyd-Caine says there has been a 5 per cent increase in the number of people being turned away from the already stressed housing agencies.

She says high rents in capital cities are one of the main reasons people are being pushed into homelessness.

"Those median rents range from $360 to $470 a week, but if you're reliant on Newstart, the maximum income a single person will receive is $358 per week," she said.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 37 seconds 4 m 37 s Martin Cuddihy reports for PM Download 2.1 MB

"It doesn't even cover a rental payment and leaves no money for food, for bills, for health costs or for transport.

"One in seven people live below the median poverty line and one in six children. That is simply not acceptable."

St Vincent De Paul Society chief executive John Falzon says the situation is distressing.

"The human right to housing has been denied to people who are doing it tough," he said.

"In a prosperous country like Australia, the level of homelessness, the level of housing stress is unforgivable."

Both organisations have called for a significant increase to the Newstart allowance and say affordable housing needs to be addressed by governments.

ACOSS says the welfare sector is also struggling to meet the needs of people suffering from mental health problems, domestic violence and sexual assault.