Federal minister Anne Ruston has defended comments suggesting a higher rate of Newstart would benefit pubs and drug dealers.
She sought to clarify her intent on Sky News on Wednesday, suggesting it was more important for the government to prepare people for work than to give them more money.
"(I) made the comment that if somebody had an alcohol addiction then giving them extra money on Newstart was more likely to result in that money being spent at a hotel," she said.
"Giving more money to somebody who finds themselves in a situation of isolation is not going to prevent their isolation.
"We need to come up with more inventive and innovative ways to deal with the barriers that people find themselves in going into the workplace."
But federal Opposition Leader Anthony Albanese described the Senator's comments as "an insult to people out there looking for work".
He urged the government to better look after Australians who were doing it tough and to increase the rate of Newstart to more than the current level of $40 per day - "far less than it costs to actually survive".
Labor Senator Marielle Smith argued that raising the rate would provide a much-needed economic boost to places like Murray Bridge, too.
"This isn't just a social policy issue; it's about growing our economy," she said.
National Council of Single Mothers chief executive officer Terese Edwards, who had appeared alongside Senator Ruston in Murray Bridge, echoed the call.
"At the event, I asked the minister to broker a meeting between the Prime Minister and people on Newstart about the urgent need for a real increase to the payment after 25 years," she said.
"The minister's deplorable comments make it all the more obvious why this forum needs to happen.
"People on Newstart, including 100,000 single parents trying to raise kids on next to nothing, should not have to put up with this sort of stigma while they're doing everything they can to find paid work and make ends meet."
Many Newstart recipients struggle to pay bills or afford housing, food or medicine, a Salvation Army counsellor told the Murray Bridge council in July.
More than a third regularly skipped meals and some had been pushed into homelessness.
Senator Ruston declined an invitation from The Standard to clarify her remarks.