"I was finding my main occupation was to be unemployed and to keep the bureaucracy satisfied ... the appearance of seeking work was more important than the actuality," he said on Friday, describing the system as bleak, useless and frustrating.

"They don't provide jobs, they farm the unemployed."

Mr Mordue was among Newstart recipients who gave evidence at a Senate inquiry on Friday. He has had two stints on the unemployment benefit - for one year after his relationship broke down, and most recently for about three months last Christmas after the newspaper he edited folded. He is now working.

His background meant nothing to the job agencies, who were interested only in ticking boxes, he said, describing the treatment of the unemployed as sadistic.

He had to apply for 20 jobs a month, and in a moment of what he said was "totally catch-22 madness", he was forced to apply for 10 jobs in the fortnight before he started a new job this year, despite already having a job and start date.

He was paid $695 a fortnight, including rent assistance, which left him with $15 a fortnight after paying the rent in his "pretty shabby" one-bedroom apartment in Sydney's west.

"You're basically pushed over a cliff and that is how the system operates, to deter or destroy, but certainly not to help," he said.

Other Newstart recipients told a similar story of box-ticking by job agencies.

Read more: We struggle daily on Newstart, recipients say

Brenton, 56, told the inquiry he has post-graduate qualifications in the sciences and worked in IT for 20 years. Now, he is required to do 650 hours a year work for the dole, which he said exceeded the maximum community-service order a court could impose in NSW for an offence with a one-year jail term. The job agencies were like parole officers, he said.

Jenny said she lost her job during a depressive episode and had been unable to find full-time work since. She now worked at St Vincents hospital one day a week, and combined with a Newstart payment, lived on $57 a day. She had taken a boarder, never used a heater in winter, tried to never use a hot tap, and was sent into a state of fear by the sound of her housemate in the shower. She ate three or four "proper meals" a week, living the rest of the time on cereal and porridge. She couldn't afford to have things fixed in her home, and after breaking her glasses recently was wearing glasses that were not strong enough. Her dog had developed a cough but she couldn't afford to take it to the vet.

She had applied for 400 jobs, with 50 interviews, in 18 months. Her job agency had not approved the volunteer work she wants to do at a Wayside, a toy shop and a book nook in a hospital, she said, describing the agencies as useless, controlling and punitive, cutting people off "meagre money for meagre reasons".

More than half of people on Newstart are over 45 and the Council on the Ageing told the inquiry the system did not work for older people given the reluctance of businesses to employ people over 50.

Council on the Ageing deputy chief executive Corey Irlam said 27 per cent of older workers reported experiencing ageism. Thirty per cent of HR professionals reported their organisation was reluctant to employ people over a specified age, he said. And of those almost 70 per cent said they would be unwilling to employ someone over 50.

People aged 55-64 years spent an average of 36 weeks looking for work, compared with 14 weeks for all age groups - and the median time for people aged 55-64 was 166 weeks.

He called for agencies that specialised in jobs for older workers, saying they reported being treated with disdain and disinterest by existing job agencies, who didn't recognise their history and considered them only for volunteer work.

His biggest concern was the legislation before parliament to increase the "liquid assets" waiting period from 13 to 26 weeks. That will force anyone applying for Newstart who has cash in the bank, term deposits, shares and other similar assets to wait six months before getting the benefit. Mr Irlam said older people should be exempt. They would lose assets they had saved for retirement and more would be pushed into poverty, he said.