New research shows Shortland and Jesmond have the fourth highest rate of poverty in NSW, more than twice the state average.
The NSW Council of Social Service report shows 27 per cent of people in the two suburbs are living below the poverty line, defined as half Australia's median household income.
The Mapping Significant Economic Disadvantage in NSW report, released on Thursday, reveals the Shortland-Jesmond statistical area was behind only three western Sydney suburbs, Guildford (28.3 per cent), Ashcroft (27.7 per cent) and Fairfield (27.4 per cent), for disadvantage.
The two Newcastle suburbs had the highest level of poverty outside Sydney. The state average was 13.3 per cent.
The Mount Hutton-Windale statistical area had the third worst ratio of disadvantage in regional and rural NSW at 24.8 per cent.
Australian Bureau of Statistics figures from 2016 show the median weekly household income in Jesmond and Shortland was $992, well below the state average of $1486, and the unemployment rate was 15.9 per cent.
The median weekly personal income for those aged over 15 was just $400, compared with the NSW average of $664.
Shortland and Jesmond are home to social housing estates, refugees and students clustered around the University of Newcastle campus.
The Newcastle Herald spoke on Thursday to disability pensioner Tom Woodhouse while he was on his way to the Jesmond shopping centre with a bag of cans for recycling.
"My neighbour saves them for me, helps me out every week. I have to because I'm always a bit short," he said.
The 53-year-old said he had been living with friends in the suburb while languishing for 15 years on the social housing waiting list.
He was not surprised his neighbourhood was one of the most economically disadvantaged in the state.
Other Hunter areas with comparatively high rates of poverty included Lemon Tree Passage and Tanilba Bay (21.1 per cent), Cessnock (20.3), Raymond Terrace (20.2), Waratah (19.9), Mayfield (19), Beresfield and Hexham (17.9), Kurri Kurri (17.8), Bolton Point (17.3), western Maitland (16.2), Belmont South and Blacksmiths (16.3), Wallsend (16.1) and Toronto and Awaba (15.5).
Regional locations such as Kempsey (21.7 per cent) and Bourke (21.6) had lower levels of poverty than the most disadvantaged parts of Newcastle.
Hunter areas with poverty ratios under 10 per cent included the Maryland, Fletcher and Minmi city fringe, Merewether, Seaham, north Maitland, Adamstown and Redhead.
Valentine and Eleebana had the fourth lowest level of disadvantage, 5.4 per cent, in NSW.
The NCOSS report was designed to shed light on the demographic and geographic dimensions of poverty.
It showed 888,000 people in NSW were living below the poverty line, including one in six children.
"On nearly all characteristics, those living outside Sydney are faring worse and are more likely to be living in poverty than their metropolitan counterparts," the report said.
"Aboriginal and Torres Strait Islander people and people with disability experience double the rates of significant economic disadvantage compared to the general NSW population."
NCOSS chief executive officer Joanna Quilty told the Newcastle Herald that students living near Newcastle University would typically be surviving on "very low" incomes.
"They may be receiving Youth Allowance, which we know is woefully inadequate, and often when they finish their studies it can take a while to gain employment," she said.
Ms Quilty said the report showed that private renters were experiencing "acute levels of poverty".
"I think it tells us that all communities across NSW are being impacted by poverty, but it is a stubbornly high rate when we've got 13.3 per cent of the NSW population living below the poverty line.
"For a wealthy state in a wealthy country, I think that is a bit of a wake-up call."
She said the report also highlighted that particular groups in society, including women and single parents, were "really struggling".
"We know there are 10 locations in regional NSW where the poverty rate for single-parent families is above 50 per cent, and in one location it's up to 65 per cent."
Gloucester (52 per cent) is one of the regional areas where more than half of single-parent households are living in poverty. Seaham and Woodville had the lowest poverty rate in NSW for single-parent families at just 1.6 per cent.
The data, prepared by the National Centre for Social and Economic Modelling, includes an interactive online map showing statistical information for each area of NSW.
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Wallsend MP Sonia Hornery said she had held a meeting last week with Shortland residents and it was evident many were struggling to make ends meet.
"There is a distinct lack of social housing in the area with extensive waiting lists, and this is forcing people into the private market, which is driving rents up," she said.
"The area has a higher population of students and refugees and the market for private rentals is very competitive.
"The percentage of households who are paying rents that exceed 30 per cent of the household income is well above the state average."
The Wallsend electorate was listed last year in the top 10 areas across the state experiencing mortgage stress. More than 53 per cent of people were struggling with their mortgages.
"We need to do more to reduce the cost-of-living pressures and invest in more social and affordable housing," Ms Hornery said.
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