Social service and charity groups have told a Senate committee visiting Launceston on Friday of the extreme lengths Tasmanian Newstart recipients need to go through to survive day to day.
The committee, which is looking at the adequacy of the allowance, heard people with chronic conditions went without medication and presented to hospital emergency departments with bad physical and mental health as they could not afford to see a general practitioner.
Stories were told of how people were forced to live in a car or place their children in precarious living arrangements as they could not access affordable or emergency housing.
Some said families were forced to separate because the rate of the Newstart allowance was so low.
Jennifer Kirkaldy, from the Salvation Army, said the welfare system was not working and had entrenched Tasmanians in poverty.
"They are giving up things that most Australians consider to be fundamental basics," she said.
They are not luxuries - they went a long time ago."
(The government) need to stop treating us like we're a blight on society.Newstart recipient Kylie Wright
TasCOSS chief executive Kym Goodes said there are 11 job applicants to every one job vacancy in Tasmania.
She said some people were restricted from accessing Newstart and were forced to deplete savings or a redundancy pay-out before they became eligible.
Ms Goodes said Tasmania had a higher rate of people on Newstart and a higher proportion of people on the allowance long-term.
Tenants Union of Tasmania solicitor Ben Bartl said Commonwealth Rent Assistance needed to be increased by 30 per cent due to the desperate shortage of affordable properties in Tasmania.
Newstart recipient Kylie Wright was one of three people who shared their own experiences with the committee on living on the allowance.
"[The government] need to stop treating us like we're a blight on society," she said.
"They need to treat us with compassion and like we are human beings."
A single unemployed person is entitled to a maximum Newstart payment of $555.70 a fortnight.
An unemployed couple is entitled to $501.70 each a fortnight.