The Morrison government has defended Newstart allowance as affordable and well targeted, as it faces criticism sparked by research showing it is one of the lowest unemployment benefit schemes in the developed world.

Analysis provided by the Australia Institute said Newstart was also the third-lowest unemployment benefit in the OECD for a newly unemployed minimum wage worker. 

The Government has dismissed the comparisons, saying most countries required contributions from employers and employees or were paid for by higher taxes.