has found some 826,000 people receiving the sub-poverty line JobSeeker payment - or 80 per cent of recipients - have been forced to survive on income support for more than a year.
The report, produced by the Australian Council of Social Service (ACOSS) and supported by the Ecstra Foundation, draws on data from the Australian Bureau of Statistics.
The findings show long-term unemployment is soaring, and is at more than double the previous peak of 350,000 after the 1991 recession.
The report also suggests due to an under-investment in employment assistance, there is only a 25 per cent chance of people who lost work during the pandemic of escaping long-term unemployment.
The rate of JobSeeker for a single person with no children sits at $45 a day.
ACOSS CEO Cassandra Goldie said the Australian government "invests far less than comparable nations on assisting people to find suitable employment" and long-term unemployment is at crisis levels.
"We are now spending less than half the Organisation of Economic Cooperation and Development average level on employment services,” Dr Goldie said.
"We need a flexible jobs and training guarantee for all people unemployed long-term, including paid work experience and training, based on individual needs.
"Income support should be lifted ... to $67 a day, and supplements for rent, disability, and caring for children alone should be increased."
Dr Goldie also said Australia needs "more entry-level jobs that are secure and properly paid, and curbs on the exploitation of workers with temporary visas and others in poorly regulated sectors on the labour market".
The ACOSS report also found there are six people either seeking paid work or more hours for every job vacancy.
People queuing outside a Centrelink office Source: William West / Getty Images
It noted that people’s chances of finding full-time employment falls from over 50 per cent when they’re unemployed for less than three months, to less than 25 per cent once they’re unemployed for more than two years.
More than half of those who have received income support since the start of the pandemic have a disability and 46 per cent are over 55 years of age.
The report also found that despite an increase in job vacancies, most positions require qualifications that people on Jobseeker payment don’t have.
Other positions involve heavy physical work unsuitable for some people with disability, inflexible hours for caring responsibilities, or are located in places job seekers can’t afford to move to.
Treasurer Josh Frydenberg has previously described the COVID-19 pandemic as "the largest economic shock since the Great Depression", and hailed the strength of the economy as it starts to bounce back.
"The jobs are coming back, unemployment is at 4.6 per cent, a 12-year low. We know that job ads are 30 per cent higher than at the start of the pandemic," he told Nine News earlier this month.
Minister for Employment Stuart Robert told SBS News the claim that the government has under-invested in income support "completely disregards the facts".
Treasurer Josh Frydenberg at his electoral office in Hawthorn East, Melbourne. Source: AAP
"We have delivered the single largest increase in the rate of unemployment benefits in more than 30 years on top of $32 billion in emergency payments provided to income support recipients during the height of the pandemic," Mr Robert said in a statement.
Mr Robert said the Morrison government is delivering a $6.4 billion investment in skills and training this year, building on a $5.1 billion investment last year to support students, apprentices, training organisations and employers.
"Earlier this year we increased the rate of JobSeeker and related payments by $50 per fortnight," he said.
"The best form of welfare is a job and this week job ads reached a 13 year high."
Australia's unemployment rate unexpectedly jumped to 5.2 per cent in October, up from 4.6 per cent in September.
