Australia is facing the prospect of at least 1.7 million people being unemployed as the spread of coronavirus wreaks havoc on the nation's economy.

Key points: The Government wants people to apply for coronavirus welfare assistance remotely

The Government wants people to apply for coronavirus welfare assistance remotely Minister Stuart Robert said it was "my bad" that he failed to anticipate demand for services

Minister Stuart Robert said it was "my bad" that he failed to anticipate demand for services The Government expects at least a million people could be unemployed

Long queues formed outside Centrelink offices for a second day, despite the Federal Government urging welfare-seekers to go home.

The Government is estimating at least 1 million people could be made unemployed, joining the 700,000 people already receiving unemployment benefits.

That could take Australia's unemployment rate from 5.1 per cent to closer to 15 per cent.

The demand for help has been so high it crashed Centrelink's website, with Government websites struggle to keep up with unprecedented demand from people seeking financial assistance amid the coronavirus pandemic.

There are estimates hundreds of thousands of Australians lost their jobs on Monday in the forced closure of pubs, clubs and indoor entertainment and sporting facilities. Places of worship were also forced to close their doors at midday on Monday.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 29 seconds 1 m 29 s Social Services Minister Anne Ruston urged people to go home and instead contact Centrelink by phone or online.

Government Services Minister Stuart Robert conceded he had failed to appreciate the scale of demand that would be placed on Centrelink's website.

"My bad, not realising the sheer scale of the decision on Sunday night by the national leaders," he said.

"That literally saw hundreds and hundreds of thousands, maybe a million people, unemployed overnight."

People are lining up outside Centrelink seeking to access expanded welfare payments, including a $550 fortnightly coronavirus supplement payment.

Prior to coronavirus, there were already 700,000 Australians on the Jobseeker payment, which was previously called Newstart.

People queue up outside the Darlinghurst Centrelink office in Sydney. ( ABC News: David Taylor )

Social Services Minister Anne Ruston urged people to go home and instead contact Centrelink by phone or online.

"No-one [should be lining up] unless you don't have a phone or you don't have internet access — you can ring up or you can go online," she told the ABC.

"We'd be seriously encouraging people to do that.

"We actually don't want people lining up. Social distancing would say we don't want them in a group. So, if you can at all avoid going to Centrelink today, that would be great."

People queue outside a Centrelink office in Melbourne on Tuesday. ( ABC News: Stephanie Ferrier )

Megan Hennessy, who was let go from her job at a school canteen and a second job, began lining up outside Centrelink in the Melbourne suburb of Fitzroy at 6:30am.

"I tried to [apply] online but it's just too difficult," she said.

"I was working seven days a week so to now have nothing is hard, it's very hard, it's very scary. It's hard not knowing when it's going to end."

Courtney Murtagh, 23, was a bar manager who was also laid off.

She tried to access Centrelink on Monday but left the line to go to the supermarket before it closed.

"I thought I had a good job, unfortunately, this is what I have to do now," she said.

"I was trying to get online but the site crashed."

Minister admits 'jumping the gun' on cyber attack claims

Stuart Robert conceded he had failed to appreciate the scale of demand that would be placed on Centrelink's website. ( ABC News: Matt Roberts )

Mr Robert, who is responsible for the MyGov website, initially claimed a distributed denial of service attack led to the system buckling under pressure on Monday.

Two hours later he told Parliament there had been no such attack and the site had simply crashed because of the sheer volume of people trying to access it.

"We investigated it, and I probably should have waited for the investigation before jumping the gun and believing the warnings," he told 2GB on Tuesday.

"So, the investigation showed there was no evidence of cyber attack. The warnings just showed the massive influx that came into our systems."

People waiting in a Centrelink line at Footscray, in Melbourne's inner-west. ( ABC News: Margaret Burin )

Senator Ruston said the capacity of the website had been upgraded on Tuesday to handle the surge in demand.

"They have increased the capacity to 150,000 at any one time, as of today," she said.

"This morning we had 123,000 on the MyGov website and the site was still operating, and operating much more quickly than it was yesterday."