Poverty is on the rise in Australia, with more than 2.5 million people - and one in six children - struggling to fulfil their daily basic needs, statistics suggest.

The Australian Council of Social Service (ACOSS) revealed in its latest national poverty report that more than 600,000 children, and one third of children in single parent families, lived below the poverty line.

The report analysed figures from the Australian Bureau of Statistics for 2012.

To be considered "below the poverty line", a family of four needed to be surviving on less than $841 a week, and a single adult on less than $400 a week.

The 2014 ACOSS poverty report also revealed more than 40 per cent of all people on social security benefits fell below that line.

It also showed that women, people with disabilities, and Aboriginal and Torres Strait Islanders were among the worst affected.

Australia's peak social services body said the new poverty figures should force a rethink of proposed budget cuts to welfare payments.

ACOSS 2014 poverty report key findings: Poverty line: single adults on $400 a week; couple with two children on $841 a week

single adults on $400 a week; couple with two children on $841 a week Poverty rate: 2,548,496 Australians (13.9%) living below the poverty line

2,548,496 Australians (13.9%) living below the poverty line Child poverty: 602,604 children (17.7%) living below the poverty line

602,604 children (17.7%) living below the poverty line Income support: 40.1% of people on social security living below the poverty line

40.1% of people on social security living below the poverty line Unemployed: 61.2% of unemployed people living below the poverty line

61.2% of unemployed people living below the poverty line Working poor: 33.2% of people below the poverty line came from a household with wages as their main income

33.2% of people below the poverty line came from a household with wages as their main income Overall growth in poverty: Poverty increased between 2010 and 2012 by nearly 1%, from 13% to 13.9%

"For us to find that we do not have the right policies, the right measures in place for us to turn the tide on the rise in poverty in Australia, is a wake up call for all of us," ACOSS chief executive Dr Cassandra Goldie said.

"We have to take this issue seriously. This is not the idea of if we just have economic growth, then everything will be all right.

"The reality is we need a really strong set of policies and we [need to] know what they are in order for us to make sure that every person - and importantly every child - in Australia has a decent chance to a decent start, and that we are a country that does not need to have one single person living in poverty."

"What we are asking the Governments around the country to do is stop what we seem to be having at the moment in Australia, which is once again a blame game that the problem, if you are living on unemployment (benefits), that you are not trying hard enough."

Salvation Army back calls to stem welfare cuts

The Salvation Army said it supported calls for a reduction in budget cuts for welfare recipients as many Australians were going without basic necessities such as food and electricity.

State by state - below the poverty line: Tasmania 15.1% (Hobart 13.8%, rest of state 16%)

15.1% (Hobart 13.8%, rest of state 16%) Queensland 14.8% (Brisbane 13.9%, rest of state 15.4%)

14.8% (Brisbane 13.9%, rest of state 15.4%) NSW 14.6% (Sydney 15%, rest of state 13.8%)

14.6% (Sydney 15%, rest of state 13.8%) Victoria 13.9% (Melbourne 13.7%, rest of state 14.3%)

13.9% (Melbourne 13.7%, rest of state 14.3%) WA 12.4% (Perth 12.4%, rest of state 12.4%)

12.4% (Perth 12.4%, rest of state 12.4%) SA 11.7% (Adelaide 11.5%, rest of state 12.5%)

11.7% (Adelaide 11.5%, rest of state 12.5%) ACT and NT 9.1% (No separate data available due to small sample sizes in ABS survey).

The Salvation Army's Ronda McIntyre said this was an indictment on a wealthy country like Australia.

"Poverty is about people; it's about women and men and children," Ms McIntyre said.

"Poverty is about individuals and families who are excluded from fully participating in society - people who are humiliated about the circumstances that they find themselves in."

Dr Goldie also said the 2014 poverty report highlighted inequality posed by Budget proposals to reduce the indexation of pension payments to the Consumer Price Index only.

Dr Goldie said this would result in higher poverty rates over time and that pension payments should be indexed to average wages.

On a state-by-state breakdown, Tasmania had the highest number of people living in poverty at 15.1 per cent, while the ACT and Northern Territory had the lowest proportion of people living below the poverty level, at 9.1 per cent each.

The most at-risk groups included: