More than 10,000 people in the Bendigo electorate are receiving the government's JobSeeker payment, as Victoria's unemployment figure continues to rise.
The state's June unemployment rate increased by 0.6 per cent to 7.5 per cent, according to the Australian Bureau of Statistics.
Victoria recorded 5.2 per cent unemployment in March.
The national average unemployment rate is now 7.4 per cent, up 0.3 per cent compared to May.
Federal member for Bendigo Lisa Chesters has called on the Federal Government to extends its $550 Coronavirus Supplement payment beyond September 24, in light of the new figures.
"The government needs to have an honest and real look at what is happening in Victoria," Ms Chesters said.
"The jobs market hasn't returned and the higher payment must remain so people can survive."
In the Bendigo electorate, 10,279 people are receiving JobSeeker payments.
The JobSeeker payment for a single person with no children includes a base payment of $565.70 and the $550 Coronavirus Supplement.
Cobaw Community Health chief executive Margaret McDonald said less clients have needed to access emergency relief services because of the higher payment.
"We predict a massive influx of help requests from September when the old rate returns," Ms McDonald said.
Cobaw's funding from the Federal Government to provide emergency relief services was diverted to other service providers in the Bendigo area at the start of the year.
"Cobaw now refers clients to Bendigo organisations and we have also received a couple of donations that have allowed us to provide our own emergency relief," Ms McDonald said.
The state government, in addition to local service clubs, op shops and foodbanks have provided emergency relief support to Cobaw.
Ms McDonald said the change in the Commonwealth's contracting arrangement has disrupted the way people navigate Cobaw's service system.
"People will still call us and that is where the referral point is different, but we still get people in touch with the services they need," Ms McDonald said.
"The Department of Social Services have been in contact and are looking at addressing the service gap and we welcome that."
A higher JobSeeker payment, formerly known as Newstart Allowance, has allowed people to live a dignified life, according to Ms McDonald.
"People have been able to pay off debts, pay for medicines and housing and support their families," Ms McDonald said.
"The new rate has meant demand for emergency relief has reduced, which is helpful because the Shire's emergency relief funding has gone to different providers."
If the JobSeeker rate is to be scaled back, Ms McDonald is calling for it to be gradual.
"We need a gradual scaling back, if any at all, or else there will be an explosion of need for services," Ms McDonald said .
"Job losses are continuing, unemployment is rising and businesses remain closed," Ms McDonald said.
Ms Chesters said she believes the actual unemployment rate is a lot higher than 7.5 per in Victoria, not accounting for the recent second lockdown.
"I believe things are only going to get worse before they get better," Ms Chesters said.
On Thursday, Prime Minister Scott Morrison announced details of the JobTrainer skills program, aimed at getting people into jobs.
"COVID-19 is unprecedented, but I want Australians to be ready for the sorts of jobs that will come as we build back and recover," Mr Morrison said.
A billion JobTrainer fund will provide an additional 340,700 training places across Australia to help school leavers and job seekers access short courses, full qualifications and pre-apprenticeships in growth sectors, the government said.
Courses will be free or low cost in areas of identified need.
Ms Chesters said she wants to know how the government's plan interacts with the state government's free TAFE model.
The state government last week revealed $163 million in targeted investments as part of an expansion of Victoria's free TAFE program.
The package will create 10,000 more free TAFE places and expand free TAFE to include new qualifications linked to jobs and government priorities.
These qualifications include Certificate IV in Mental Health Peer Work, Certificate III in Health Services Assistance and Certificate III in Civil Construction Plant Operations.