A UNSW survey shows community services are already struggling with demand.
Government action on income support, housing and employment could lift people out of poverty.
The report was launched today at the National Press Club in Canberra to coincide with Anti-Poverty Week.
Beyond the personal effects on individuals, vast disparities in income can erode social cohesion and undermine economic growth, researchers say.
UNSW and the Australian Council of Social Service have launched a new collaboration to tackle poverty and inequality through high-quality research, policy development and advocacy.
The unemployed are worse off now in real terms than 15 years ago and are falling further behind, according to a new analysis by Professor Peter Whiteford.