A return to the old level of the JobSeeker dole payment could see recipients trying to live on $7 a day after paying the rent.
A survey by Anglicare Australia found the temporary increases during the COVID-19 pandemic are helping people to eat properly.
JobSeeker, formally known as Newstart, is being boosted by the temporary coronavirus supplement, but that ends in March.
The supplement was $550 a fortnight at the start of the pandemic, but it has shrunk to $250. It will be further reduced to $150 per fortnight from January 1 subject to the passage of legislation.
Before the supplement, the survey released on Tuesday found almost three quarters of people on the dole skipped meals every week, with most missing an average of three to four meals over seven days.
Few people (13 per cent) who were surveyed between July and November thought their Centrelink obligations to get the dole were helping them find paid work.
Nearly four in five thought they were pointless, while around three quarters want to do Centrelink activities that are fair and lead to work.
Anglicare Australia executive director Kasy Chambers said the survey shows there needs to be an overhaul of the system and the rate of JobSeeker should be raised for good.
“It should be a scandal that so many people were forced to skip meals so often,” she said.
“Some people we surveyed were couch surfing and skipping meals every day. With so little money, they simply had no choice.”
Ms Chambers said raising the rate for good will stop condemning these Australians and their children to a life of poverty.
The survey also shows there is a need to overhaul a system that isn’t leading to work.
“Work for the Dole and Jobactive have repeatedly been shown to fail – and they waste millions of dollars a year,” Ms Chambers said.
“Yet most people in our survey actually want to do activities that matter, and that lead them into work. Instead they are being forced into pointless busywork.”