Unemployed people will have to prove they are actively looking for work over the Christmas period, while other welfare recipients are given a break in a move that's been labelled a "nightmare" by the unions.
In a notice sent to people on JobSeeker payments this week, the Department of Employment and Workplace Relations wrote that mutual obligations would be suspended until January 2 next year.
The Australian Unemployed Workers' Union said the department's directive meant some jobseekers would still need to fulfil their obligations, while others would not.
"It has become nothing short of a nightmare, due to a mix of government incompetence and malice, thousands have been unfairly forced to perform mutual obligations over Christmas," the statement reads.
Jobseekers in the Workforce Australia program need to accrue 100 points by completing activities including submitting job applications, doing paid work, or training.
Welfare recipients across the country must report these activities by a deadline to receive their payments.
One job seeker said they were feeling the stress of struggling to pay for basic necessities during the holiday season.
"Being unable to participate in any gift sharing with friends always makes me feel like a heel too, everything is melting into bills and barely survivable groceries," they said.
It comes as new research has found housing affordability stress skyrocketed over the 2021-22 financial year with NSW, WA, and Tasmania among the worst affected states.
The analysis by Homelessness Australia revealed an additional 8,408 Australians experienced severe finance and housing issues significant enough to cause them to seek homeless support.
Tasmania recorded the biggest increase of almost 19 per cent, trailed by WA at 15.4 per cent, and NSW at 10.4 per cent.
Homelessness Australia chief executive Kate Colvin said as a wealthy nation, Australia could do more to support vulnerable people doing it tough.
"Many of us are enjoying holidays and Christmas feasts at this time of year, but spare a thought for the almost 100,000 Aussies seeking homelessness support because the cost of living and housing was just too much to bear," she said.
