As a cabinet minister, Ms Macklin earns $6321 a week, 25 times the rate of Newstart. The cost of renting alone in her suburb of Ivanhoe is greater than the Newstart allowance, with the median rent for a one-bedroom flat in her suburb at $270 a week. Australian Council of Social Service chief executive Cassandra Goldie said evidence to three parliamentary inquiries had shown the allowance had not increased in real terms in two decades, and as a result some recipients were forced to live in ''extreme poverty''. ''The minister should look at the evidence of people who are actually trying to do that,'' she said. ''The government talks about evidence-based policy, so we are urging her to look at the evidence.'' Kate Beaumont, the vice-president of the National Welfare Rights Network, said Ms Macklin's comments were surprising.

''As a key minister involved in securing the historic 2009 pension increase of $32 per week, she understands the needs of people doing it tough,'' she said. Ms Beaumont said Ms Macklin's comments seemed at odds with those of Labor senators who in a committee report in November called for the allowance to be increased. The calls by welfare groups for Newstart to be lifted have been echoed by others, including the Business Council of Australia, which has warned that the lack of an increase might be entrenching poverty. In 2010, the Organisation for Economic Co-operation and Development said the payment was so low it might not be enough to enable a person to look for a job. The government has also faced heavy criticism for the changes that shift thousands of single parents from the parenting payment to the Newstart allowance when their youngest child turns eight.

While parents who started receiving the payment after July 2006 already face these conditions, until now those who were receiving the parenting payment before July 2006 were able to keep it until their youngest child turned 16. Ms Macklin said the changes were designed to ensure all parenting payment recipients were treated in the same way. ''What's important for people who are unemployed is that we do everything possible … to help people get into work, and that's what we'll be doing with these single parents as well,'' she said. ''The more people going back to work the better. It's better for the family, it's great to see mum and/or dad going … to work. Unfortunately we have far too many children growing up in families where nobody is working.'' But Dr Goldie said recipients of the parenting payment were already required to seek work, and about half of them were already doing some paid work. ''The only thing that's going to change for them is a significant cut in their income support, and we oppose putting any other parent on to a payment which everybody acknowledges is already far too low,'' she said.

''We're talking about households with children in them. Why would we do that?'' The change will have the greatest impact on parents who work part time, because parenting payment recipients are allowed to earn more than Newstart recipients before their payments are affected. As a result of the change, a single parent who gets no income from work will be $115 worse off a fortnight, while those who earn $400 a week from work will see their income drop by $223 a fortnight. In August, Employment Minister Bill Shorten said he took the adequacy of the Newstart allowance ''very, very seriously'' and said it would be ''very, very tough'' to survive on the payment, but he did not commit to raising the allowance.