The Newstart unemployment benefit needs to be raised significantly to stem the growing numbers of Illawarra people living in poverty, says a Warrawong community worker.

Phoenix Van Dyke, the housing communities program co-ordinator at Warrawong Community Centre, was responding to an Illawarra Forum review which shows that more than 51,000 people in the Illawarra and Shoalhaven were living below the poverty line.

Illawarra Forum chief executive Nicky Sloan said the most recent National Centre for Social and Economic Modelling statistics showed about 13.6 per cent of Wollongong and Shellharbour residents were considered to be in poverty, and 17 per cent of the Shoalhaven population.

Ms Sloan said poverty not only affected people financially, but also their physical and mental health, social life and self-esteem.

"We are concerned that the widening gap between rich and poor in Australian society will broaden to become a gap between the healthy and sick, educated and uneducated, housed or homeless," she said.

Many people on low incomes were spending up to 50 per cent of their income on rent alone - more than 32 per cent of households in the Wollongong LGA were in rental stress.

Ms Van Dyke runs programs for people living in public housing and most received Centrelink benefits.

"Some have some casual work, many are volunteering or on courses and hoping to get some work and don't."

She said the Newstart allowance of $35 a day put people below the poverty line, while people on the disability support or aged pension were on the poverty line.

"There is definitely a need to increase Newstart.

"It doesn't even allow people to go to job interviews," Ms Van Dyke said.

Job training and better co-ordinated government support were also needed, including not raising public housing rents while new employees settled into their workplaces or until they got permanent work.

"People think public housing is cheap and it is compared to private rentals, but it's still 25 to 30 per cent of their income."

Ms Van Dyke said the Warrawong Community Centre provided free lunches four days a week.

For some people that was their only meal for the day.

"We have on average 60 people a day - it was about 40 a few years ago ... apart from lunch we have five or six people come in and ask for food."

Rising electricity prices also contributed to poverty but charities could only do so much, she said.