The Morrison government is doubling mutual obligation requirements for all states other than Victoria.

"Around the rest of the country, we are moving it slowly, steadily back to where it was," Trade Minister Simon Birmingham said on Friday.

"Not jumping right back there but just increasing that expectation for people to be out there, looking for work because we are seeing jobs being created."

People receiving the JobSeeker unemployment benefit currently have to apply for at least four jobs per month.

That will double to eight from September 28.

Prior to the coronavirus pandemic, it was up to 20 jobs per month.

People will also be penalised for refusing to engage with employment providers.

Australia's unemployment rate has unexpectedly dropped to 6.8 per cent after more than 110,000 people found work in August.

But the effective rate of unemployment is said to be well above 10 per cent.

There are 13 people unemployed for every job available with the problem much worse in regional communities.

"Common sense needs to apply here in terms of how this works," Labor deputy leader Richard Marles said.

"There is a long way to go before we are out of this."

Greens senator Rachel Siewert said reintroducing harsh penalties in the midst of a recession was cruel and unfair.

Meanwhile, charities and community groups are facing a perfect storm of higher demand for services and reduced funding due to the pandemic.

Three quarters of those working with migrant and multicultural communities, Indigenous people and in legal and social advocacy have reported increased demand for services.

At the same time, 31 per cent of organisations froze recruitment and 21 per cent reduced staff hours, mainly due to a loss of income.

One in five service providers said jobs would go when JobKeeper wage subsidies taper off, according to the UNSW study for the Australian Council of Social Service.

ACOSS chief Cassandra Goldie said the government needed to provide additional financial support for the community sector with its services needed more than ever.

The sector also wants a government commitment to renew the Equal Remuneration Order supplementation, set up in 2012 to ensure fair pay within community sector organisations.

The supplement, worth $554 million in 2020/21, ends in June 2021.

Australian Associated Press