Only a fraction of welfare organisations are able to meet soaring demand for help in the lead-in to Christmas.
'Helping people in need during a cost-of-living crisis', a report from the University of NSW Social Policy Research Centre, has found only three per cent of 1470 homelessness, mental health and family violence organisations are always keeping up with demand for services.
Almost a fifth of providers were coping until COVID-19 supplement payments for low income earners were withdrawn by the federal government in March last year, when the figure dropped to six per cent.
The research, conducted for the Australian Council of Social Service and the State and Territory Councils of Social Service, clearly shows community service providers are in the grip of an unprecedented period of intense demand, ACOSS deputy CEO Edwina MacDonald says.
"Intensifying financial pressures on top of disasters are really affecting people and overly straining providers this Christmas," Ms MacDonald said.
Individuals needing more assistance was coupled with those providers facing staff shortages and higher operating costs, placing limits on how much they could do, she added.
"Government relies on our sector to serve the public interest on its behalf.
"It is therefore vital that it properly fund services and invest in service sector staff who have been doing an incredible job in tough circumstances."
Homelessness services faced particular challenges, with not one of the 180 services surveyed saying they were always able to meet demand and one in 10 saying they were never able to service all people.
Two thirds of organisations had an increase in demand for services throughout the year, including 85 per cent of financial, legal and emergency services, and 80 per cent of those providing domestic and family violence support.
More than half of service providers also said their work was becoming more burdensome, as the needs of their clients became more complex.
Family and sexual violence organisations were also struggling to operate, as they remained overwhelmed and underfunded, Full Stop Australia CEO Hayley Foster said.
"We've seen a shadow pandemic when it comes to family and sexual violence," Ms Foster said.
"Right now, many services are so underfunded that they can barely deal with the crises on their doorstep, let alone provide the ongoing support survivors need to heal and recover.
"It's simply heartbreaking."
