The federal government should avoid short-term funding cycles for welfare programs, a parliamentary committee suggests.
Three to five-year agreements would help with funding certainty and ensure progress is made, the committee on intergenerational welfare dependence said in its report tabled on Friday.
The committee put forward 16 recommendations to the government, including working with the states and territories to immediately increase funding for emergency relief housing and low-cost accommodation.
Indigenous Australians and single parents are most at risk of entrenched disadvantage, the report found.
Education and employment were highlighted as key factors towards this.
In order to be successful, welfare programs should take into account a recipients' location, to ensure local circumstances are catered for, the committee says.
Research shows there is a link between parents receiving welfare and their parents also depending on government assistance, but the committee noted there was no single factor which caused this.
The report also notes the importance of early and targeted intervention to prevent entrenched disadvantage.
The best course of action is to target people during phases of life transition, such as pre-natal and parenthood, as well as educational and employment milestones, the committee says.
The committee also recommended the federal government should work with the states and territories to improve data collection and ensure there's no double-up with funding.