Indigenous people in the Northern Territory have been scared off applying for welfare due to horror Centrelink experiences, a Senate inquiry has been told.
An Indigenous advocacy group said large numbers of people aren't on benefits they're entitled to but the exact figures hadn't been researched because the government didn't want to know.
Those not receiving government support rely on family members which contributes to the 45 per cent of Indigenous households in the Northern Territory experiencing poverty, a committee investigating the Newstart allowance has heard.
Dr John Boffa, of the Central Australian Aboriginal Congress Aboriginal Corporation, gave one example which he said represented the plight of many.
He spoke of a woman on the single parent pension who then moved in with her partner who was not receiving any financial benefits.
The couple went to Centrelink in a bid to increase their household income but the woman was accused of fraud and ordered to repay her pension.
The problem was eventually resolved but Dr Boffa said it's these experiences which make people "give up".
"This is the system. That's just one story. There are many stories, particularly of men not accessing payments," Dr Boffa said in Alice Springs on Friday.
"There are lot of men not on any benefits they're entitled to because of difficulties of how you access the system and how difficult it is, people give up.
"There are 10,000 Aboriginal people in our client base and 70 per cent are on health care cards. How many of them are getting appropriate Centrelink payments?
"The system doesn't really want to know, otherwise the research would be done.
"In spite 28 years of sustained economic growth, we've now got an inquiry on whether people who are unemployed should live above the poverty line."
The Northern Territory's peak welfare organisation said half of the indigenous people in the NT are not in the labour force, which includes carers, elderly and disabled people.
The Northern Territory Council of Social Service said Aboriginal and Torres Strait Islanders are 12 times more likely to be homeless than the broader Australian population.
Newstart has been stagnant for 25 years and submissions made to the inquiry urged the $278 per week to be increased by $75.
Welfare advocate Tessa Snowden echoed the sentiment of Dr Boffa and called for more research into indigenous welfare numbers.
"Our concern is that (people) are not receiving any (government) support at all, relying on families and pushing people further into poverty," she said.