Federal Families Minister Jenny Macklin, who is paid more than a $6,000 per week, says she could live on the dole of about $35 a day.

Thousands of single parents will lose their parenting payments and be moved onto the dole when their youngest child turns eight under changes which came into effect on New Year's Day.

Their payments will be cut by up to $110 a week in a move which is expected to save the Federal Government about $700 million over four years.

The Government insists its changes to welfare payments will get more people into work.

Last year government minister Bill Shorten raised concerns about the low rate of the unemployment payment, and welfare groups want it raised by about $50 a week.

When asked by reporters in Melbourne on New Year's Day if she could live on the dole, Ms Macklin replied: "I could."

"And of course we understand that what's important for people who are unemployed is that we do everything possible to help people get work," she added.

"That's the whole focus of this government."

As a cabinet minister, Ms Macklin earns $328,700 a year - or $6,321 a week.

She says there needs to be a strong incentive for people to find work.

"The more that people go back to work, the better.

"It's better for the family, it's great for the kids to see mum and or dad or both going to work.

"Unfortunately, we have far too many children growing up in Australia where nobody is working."

Ms Macklin says the Howard government moved some people off the parenting payment in 2006 and the latest changes make the laws more consistent.

Welfare groups have condemned the move but welcomed other changes to family payments.

Low and middle-income families will now get more money to cover education expenses, while fathers and some partners will get two weeks paid parental leave.