The report, titled "Helping people in need during a cost-of-living crisis" and released by the Australian Council of Social Service (ACOSS), was based on a survey conducted by the Social Policy Research Center at the University of New South Wales in September.
It found that only 3 percent of the 1,470 organizations surveyed said their main service can always meet demand.
Housing and homelessness services are particularly stretched. Not a single one of the 180 services in the survey said they could "always" meet demand and as many as one in 10 said they could never meet demand, according to the report.
About 66 percent of organizations reported increased demand in 2022, including 85 percent of those delivering financial, legal and emergency support, and 80 percent of those delivering domestic and family violence services.
"It is clear that community services are experiencing something unprecedented. Intensifying financial pressures on top of disasters are really affecting people and overly straining providers this Christmas," said ACOSS Co-Deputy CEO Edwina MacDonald.
"As people increasingly search for help, services face higher operational costs and staff shortages, further limiting their ability to assist their communities."
Australia has experienced eight consecutive interest rate hikes this year, and the latest data from the Australian Bureau of Statistics showed the country's annual inflation hit a 32-year high of 7.3 percent.
The report also found natural disasters such as the flooding events and the ongoing impacts of COVID-19 contributed to the demand and the stress in community services, as the need for emergency housing and mental health support escalated.
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