A 67-year-old grandmother who says she has to work on a phone sex line to "make ends meet" while battling life-threatening illnesses has challenged Prime Minister Tony Abbott over budget cuts during an ABC Radio phone-in.

Speaking to Jon Faine on 774 ABC Melbourne on Wednesday, the PM took a heated call from Gloria of Warburton.

"Mr Abbott, I would like to ask you if you would like your mother or your grandmother to be in my situation?" she asked.

"I'm a 67-year-old pensioner [with] three chronic, incurable medical conditions, two life-threatening.

"I just survive on around $400 a fortnight after I pay my rent and I work on an adult sex line to make ends meet.

"That's the only way I can do it."

Gloria said she had calculated that budget changes would cost her an additional $850 a year, taking into account GP co-payments and increases in medication costs.

"What do you suggest I cut out Mr Abbott? Food, electricity, firewood, Christmas [and] birthday presents to my grandchildren?" she asked.

"Or should we all just die and get out of your way?"

The Prime Minister, who winked at Faine when Gloria said she worked on a sex line, offered this response: "Well, Gloria, I absolutely understand that you're doing it tough."

But he was soon interrupted by a clearly unhappy Gloria: "But you don't give a stuff though do you?"

When asked to "keep it nice" by Faine, Gloria responded: "I don't feel very nice about you Mr Abbott, and why should I?"

When the line was cut to allow the Prime Minister to speak, Mr Abbott said the Government's decision to cut the carbon tax would offer some financial relief to Gloria.

"What I want to do is get rid of the carbon tax but you will keep the compensation that the former Labor government gave you to pay for the carbon tax," he said.

"So even if you spend $70 going to the doctor, even if you pay an extra 80 cents for a prescription, almost certainly in pure cash terms you will be somewhat better off.

"Now I'm not saying you're on easy street, I'd never say that, obviously you're doing it tough."

Mr Abbott explained the "reality here" included the safety net, which applies after seven visits to the doctor, and an "extra couple hundreds of dollars a year" as a result of the carbon tax compensation.

A spokesman for the Prime Minister said his wink to Faine had been an act to "reassure" the broadcaster that he was happy to continue with the call.