Despite federal Labor's mea culpa on welfare cuts to single mothers, former prime minister Julia Gillard stands by the controversial policy decision.
1 Oct 2013 - 7:57 PM  UPDATED 1 Oct 2013 - 8:09 PM

Former prime minister Julia Gillard has defended her government's controversial decision to cut welfare payments to single mothers.

The two men vying for the federal Labor leadership - Bill Shorten and Anthony Albanese - have both disowned the policy and admitted the party did the wrong thing when it implemented welfare cuts this year.

But Ms Gillard won't back away from the decision.

"I'm going to stand up for it as a decision of the government I led," Ms Gillard said during an interview in Melbourne on Tuesday night.

"It was always going to be controversial".

In January, tens of thousands of single mothers, many working part time, were shifted off parenting payments and onto the unemployment benefit, Newstart, leaving many between $60 and $100 a week worse off.

The decision was to save taxpayers $728 million over four years.

Ms Gillard admitted the unemployment benefit Newstart Allowance was too low and there needed to be more flexibility with the federal government's approach to helping the unemployed.

"I'm a big believer in the dignity that comes from work," Ms Gillard said.

She talked about entrenched poverty in her former electorate Lalor where there were some families of three generations of welfare recipients.

"I want to see everybody have the benefits, choices and essential dignity that comes with access to paid work," Ms Gillard said.

She was hailed a feminist hero and hit world headlines for her misogyny speech to parliament in October last year.

The legislation introducing the welfare changes to single parents passed the Senate on the same day.