''Good luck!'' says the 26-year-old, who will start receiving the $35-a-day Newstart payment for the second time in three years this week, after being made redundant from her job at the Australian Film Institute.

Ms McCrae-Moore did well at school, got into Melbourne University, received first-class honours in her arts degree, majoring in cinema studies, and began job-hunting in 2010.

She lived on Newstart for three months before finding work as a membership co-ordinator and says it was a difficult existence.

''You are living on the poverty line or just above,'' she says. ''It is great that Newstart is there but it no longer reflects the true cost of living.''

When she lost her job in October she had just moved into a share house in North Fitzroy, where she pays fortnightly rent of $455.

She may have to consider cheaper accommodation but says her inner-city location makes it easier to bike-ride to job interviews, proof of which is required before receiving each fortnightly payment. Newstart is not enough to run a car.

Without rent assistance, for which Ms McCrae-Moore also intends to apply, the $492.60 Newstart allowance would leave her $37.60 each fortnight to cover her phone bill, utilities, food and discretionary spending. An additional $80.67 rent assistance would leave her about $65 a fortnight to pay for food and small luxuries.

But the real trap is unforeseen costs.

''Any out-of-the-blue expense is likely to hit you the hardest,'' she says. ''You would have to get a loan, which is why a lot of people forgo things like dental work and glasses.''

It is a precarious existence but Ms McCrae-Moore says she is fortunate to be able to dig into her $3000 savings and rely on limited support from her parents. To save money she might go to friends' homes for dinner and shop at op shops.

If she goes out for breakfast, she will order only a coffee. On the weekend, a bike ride replaces a film.

''Having lived on the dole I know I will need to compromise. There is no room for the little things in life that make people feel good about themselves - social things, the things that get you out of the house.''

Ms McCrae-Moore says she has known of people taking low-paying, cash-in-hand jobs, with no employee protection, which they do not declare so as not to reduce their dole payment.

She says she cannot imagine how anyone could survive on Newstart alone without rent assistance, savings and the support of a family.

''I am someone who has a lot of support and I find it difficult, so I can't imagine how someone who does not have that would feel,'' she says.

''People on the dole are not getting an easy ride.

''You can live in the essential definition of the word but I can't imagine anyone wanting to live that way for very long.''