The number of Australians on income support has shrunk by more than 150,000 in a year as the pandemic recovery continues and more people find work in the competitive jobs market.
There are also fewer JobSeeker and Youth Allowance recipients than pre-pandemic, with numbers contracting by almost 60,000 when comparing March 2020 to November 2022.
Despite the decrease in welfare recipients, the long-term unemployed continue to be locked out of the jobs market.
A recent Anglicare Australia report found the number of people with barriers to work, such as people with disabilities and those without qualifications, had not budged in the employment figures, despite falls in overall welfare recipients.
Social Services Amanda Rishworth said it was good to see more people in the workforce.
She also said the average person on unemployment payments spends almost three years on income support.
"Everyone deserves the dignity of work and the government is committed to expanding employment opportunities for all," she said.
The Albanese government has been under pressure to lift income support payments, with JobSeeker payments as low as $48 a day for single recipients without dependents.
The adequacy of income support payments will be reviewed by a newly established committee that will meet for the first time on Friday.
Welfare groups, economists, academics, charities, unions and business groups all scored a spot on the interim 14-member "economic inclusion" committee set up by the government.
Former Rudd and Gillard government minister Jenny Macklin will chair the committee, which was set up to provide independent advice on income support payments ahead of every federal budget.
Other members include Australian Council of Social Service boss Cassandra Goldie, Australian Council of Trade Unions head Sally McManus, and Business Council of Australia chief executive Jennifer Westacott.
Independent senator David Pocock secured government support for the committee last month in exchange for his vote on the Albanese government's workplace relations bill.
The reforms, designed to pave the way for more wage-rise negotiations between employers and staff, were enshrined in legislation in late November.
Senator Pocock has been an advocate for higher JobSeeker payments to stop people living in poverty.
The newly-established committee has been criticised by the Australian Unemployed Workers' Union for failing to include welfare recipients as members.
The AUWU also raised concerns about Ms Macklin's appointment given her comments in 2013 suggesting she could live on a $35-a-day job seeker payment, then known as the Newstart allowance.
