Australians on government support payments can only afford 6 per cent of rental properties, analysis by Anglicare shows.
A snapshot of more than 67,000 rental properties available across Australia on March 24 has found only 3,729 were affordable for households on government income support payments.
Anglicare Australia's report shows there wasn't one rental property affordable for a single person on Newstart or Youth Allowance in Sydney, Canberra, Melbourne, Adelaide, Darwin or Perth on the specific day in March.
The group calculates affordability on the basis that rent accounts for no more than 30 per cent of a household budget.
Anglicare Australia's Executive Director Kasy Chambers said the housing system is failing millions of Australians.
"What we see at Anglicare is people coming in to our emergency relief services, where we provide food parcels," she told SBS News.
"We see people who keep their children back from school on days of excursions or days they cant afford to put anything in the school lunchbox. We see people going without filling needed medical prescriptions.
"You can't half pay your rent, you can't pay it late."
Anglicare wants to target negative gearing and tax exemptions for property investors, which it says is fuelling the rising cost of rental properties.
The group is also calling for an increase in the Commonwealth Rent Assistance payment and changes to state and territory laws regarding renters' rights to protect them from rent rises, discrimination and landlords who refuse to maintain properties.
The Rental Affordability Snapshot comes after Treasurer Scott Morrison announced last Decmeber, that from this July, newly-arrived migrants will have to wait three years instead of two to access a range of welfare payments - including the Family Tax Benefit, Paid Parental Leave and Carer's Allowance.
Ms Chambers said migrants rely on welfare payments to start their new lives in Australia.
"We certainly know migrant communities - particuarly newly-arrived migrants - often have lower incomes, and so they will be struggling much more in this kind of rental market," she said.
"We also know even though there were properties that were slightly more affordable, they're out in the outer suburbs. There's a lack of public transport out there, it makes for very long commutes for people, and so building community, getting to know people, getting to work, is very very difficult."
Deloitte joins calls to raise benefits
The Deloitte Access Economics Monitor is calling for an increase to government benefits ahead of next week's budget, which takes place on May 8.
CEO of the Australian Council of Social Service, Dr Cassandra Goldie, is backing those calls.
"This (rental) crisis is a situation where many of us across the community sector have been warning governments successively that to fail to act will lead to more and more poeple being on the streets, and in increasingly unacceptable housing conditions," she told SBS News.
Dr Goldie said people who rely on government payments simply can't survive on it alone, and that it is vital the government heeds Deloitte's call.
"We need national reform about security of tenure in rental properties. For many people, renting is going to be a long term housing option, and in some cases, a lifetime housing option."
'Half my wage goes on rent': student
Bianca Atkins is a 24 year old full-time nursing student living in Melbourne's northern suburbs who receives Youth Allowance and Rent Assistance payments.
She said, even with her part-time job, her welfare payments barely cover the cost of rent.
"I work two days a week to supplement that, but even still, that payment is less than my entire monthly rent," she told SBS News.
"I generally find half of my wage, including Youth Allowance, goes on rent. A big bill or an unexpected payment can really throw me into the red, which is really scary."
Ms Atkins has moved house four times in the past three years because she became unable to pay rent when the property's landlord raised the price.
As someone with no children and who is over 18 years old, Ms Atkins is eligible for a maximum of around $500 a fortnight, but only if she earns below a roughly $200 threshold at her part-time job in that time.
She said an increase in her payments would help a great deal.
"The more you work, the less Youth Allowance you get. It's a bit of a catch 22. It can be a bit hard to get ahead," she said.
"Even a hundred dollar increase would make a massive difference."
But Kasy Chambers says even if welfare payments increase, and measures forcing landlords and property managers to become more sympathetic towards renters are legislated, there's still going to be more work to do.
"This isnt going to be fixed overnight," she said.
"We really do need to have a bipartisan approach to this. We need all parties to agree that we're in trouble, that we need to fix this."
"I dont think that landlords, individual landlords, are the baddie in this. They're doing economically rational and sensible things. What they're doing is what the taxation system is encouraging them to do."