Homelessness services are turning away hundreds of people every day partly because they can't cope with increased demand from Newstart recipients, a leading advocacy group said.

The number of people on Newstart payments seeking homelessness services has jumped a massive 75 per cent in just six years, according to data from Homelessness Australia.

"Now we are seeing more people who have Newstart allowances coming to our services and being homeless," head of Homelessness Australia, Jenny Smith, told Hack.

The data found that 30,761 people on Newstart asked for homelessness support in 2011-12. By 2017-18, that number had jumped to 54,066.

"The cost of housing is the most significant problem for us as a community," Ms Smith said.

People on our lowest incomes, and people who have challenges in life, just can not compete in the private real estate market.

Newstart payments haven't increased in real terms - that is, beyond inflation - since 1994. The current rate is $277.85 a week, which is around $39 a day.

Welfare recipients who are eligible for rental assistance receive at most $137.20 a fortnight.

By contrast, the median rent per week in the capital cities is $465, compared to $378 a week in the regions.

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Ms Smith said Newstart payments aren't enough to cover basic necessities.

"Housing costs, cost of living in general greatly outpace the cost of Newstart."

Ms Smith said the Federal Government has not increased support for homelessness service providers to meet increased demand.

"They are turning away hundreds of people every day. But other than support from state and territory governments, they have had no increase for a decade now," she said, adding that service providers find it "heart-breaking" to have to turn people away when they are at their most vulnerable.

There has been a significant increase in the number of people accessing Newstart payments - 28 per cent over the last six years - but Ms Smith said that alone does not account for the spike in demand for homelessness services.

"Federal investment in housing and homelessness services has decreased quite significantly in real terms over the last two terms of government."

"We don't have a national policy or strategy to reduce homelessness," Ms Smith said.

Business groups have joined advocacy organisations in calling for an increase to Newstart payments. Labor also wants an increase to the payment rate, but the Federal Government remains opposed to the move.

Shadow Social Services Minister, Linda Burney, told Hack she was "shocked" by Homelessness Australia's data.

"The Government has refused to increase Newstart for over six years; the Opposition is calling on the Government to increase Newstart," she said.

"I think the Government needs to look very closely at what Homelessness Australia is saying and recognise that people who are living off Newstart can not compete in the rental market."

Ms Burney is also calling for the Government to fund homelessness services appropriately.