Australian students are trying to scrape by on just $13 a day as welfare payments fail to keep pace with the cost of living, new analysis shows.

A report by Homelessness Australia found people on Youth Allowance had only a tiny amount of cash left after paying surging rents.

Meanwhile a separate report by the government’s own Economic Inclusion Advisory Committee, said Youth Allowance and JobSeeker recipients faced “the highest levels of financial stress in Australia”.

The committee report released late Tuesday said both social security payments were “seriously ­inadequate” and needed to be increased.

However Treasurer Jim Chalmers is widely expected to reject the recommendation in the federal budget.

More than one million people in Australia receive working age payments like JobSeeker or Youth Allowance.

The federal government has been urged to urgently raise the rate of Youth Allowance and Austudy, which is currently $562.80 a fortnight for a single student with no children.

Homelessness Australia’s two-year longitudinal analysis looked at a student renter living on Youth Allowance payments.

Their income was compared to the rising cost of rent on a shared two-bedroom unit across the country.

After paying rents, students had $13 left to cover food, medical and transport costs, leaving many young people struggling to eat three meals a day.

Two years ago, an average student spent close to two-thirds of their income on rent for sharing a two-bedroom unit.

Now, close to three-quarters of a student’s income is funnelled into rent, leaving them with little for essentials.

While youth allowance payments have increased by ten per cent in the past two years due to CPI indexing, rents also surged by 24 per cent.

The average split on a two-bedroom unit is now $245.50, up from $198 in April 2021.

Many students are finding it increasingly difficult to secure a rental, as landlords assess them as having small incomes and being undesirable tenants, said Homelessness Australia CEO Kate Colvin.

“What we see is more and more young people coming to homelessness services, but actually it’s also harder for homeless services to support young people into a rental because landlords just will not rent to someone on such a low income,” she said.

The analysis has been released to coincide with Youth Homelessness Matters Day, as welfare organisations call on the federal government to develop a standalone strategy to address youth homelessness.

JobSeeker payment

The government’s economic advisory committee also recommended a substantial increase to the JobSeeker and Youth Allowance in its report released Tuesday.

It urged a 40 per cent increase to JobSeeker to about $1000 a fortnight.

The committee said “all indicators” showed these payments were seriously inadequate — “whether measured relative to the National
Minimum Wage, in comparison with pensions, or against a range of income poverty measures”.

“People on these payments face the highest levels of financial stress in
Australia,” stated the report.

“Committee members heard from people who live on income support
having to choose between paying for their medicine or electricity bills.”

News Corp reports that Treasurer Jim Chalmers will reject the recommendation estimated to cost $24 billion.

In a statement on the report, Dr Chalmers and Social Services Minister Amanda Rishworth said the government would always look to support those most in need, where it was responsible and affordable to do so.

“While we can’t fund every good idea, there will be measures in the May Budget to address disadvantage,” the statement said.

“This will include energy bill price relief that prioritises those on payments and pensions.”

The statement said the advisory committee would continue to play an important role providing advice on barriers to work and the effectiveness of payments.