Kiama cafe owner, Darren Ormsby, has had an unbelievable number of applicants suddenly, and without explanation, withdrawing from all communication.

"We have been advertising for kitchen staff, wait staff and baristas for a while, we get applications and we fix up interviews but they just don't come," he said.

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Mr Ormsby said he is not the only one facing this issue and believes the problem stems from the JobSeeker payment.

"People on JobSeeker payment need to apply for a certain number of jobs each week to still be eligible and we seem to be on the unfortunate end of it," he said.

Mr Ormsby believes the mutual obligations for the payment do more harm than good, making people apply for jobs they don't want in the first place.

"The hospitality industry is crying out for staff and the last thing we need is for people to waste our time and efforts," he said.

The JobSeeker payment, the Services Australia website says, is for people seeking financial help if they're between 22 and Age Pension age and looking for work.

To continue to be eligible for payment, they need to meet certain mutual obligations - one of which is constantly looking for work.

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The Australian Unemployed Workers' Union secretary, Daniel Levy, said a lot of Australians on JobSeeker are living in extremely difficult circumstances.

"The government says it doesn't matter what your life situation is, you've to do this set thing to receive your payment and, if you don't, you lose your payment," Mr Levy said.

While he doesn't condone interview no-shows, the unionist believes the policy is to blame.

"People who are on that payment often have to choose between basic necessities like meals and medicine," he said.

Mr Levy believes the relaxation of mutual obligations and the increase in base pay rate in JobSeeker allowance during COVID seemed to have had an encouraging positive result.

"According to a research conducted during the pandemic, people spent more time looking for work and felt more secure than they ever had," Mr Levy said.

Mr Levy called a policy reform and said JobSeeker needed a complete overhaul.

"It needs to stop being means and assets tested. It should be entirely focused on ensuring that everyone has an income above the poverty line," he said.