Unemployed workers are set to receive a modest boost to fortnightly JobSeeker payments once coronavirus supplements are scrapped.
The increase is expected to be paired with stricter mutual obligation requirements.
The current supplement, worth $150 a fortnight, is due to end on March 31.
Without government intervention the unemployment benefit would return to its pre-pandemic rate of $565 a fortnight, or just $40 a day.
Senior ministers have held a series of meetings to determine a new permanent JobSeeker rate.
The new welfare rate is expected to be taken to the coalition partyroom in Canberra on Tuesday and announced afterwards.
The federal opposition has been calling to increase the JobSeeker rate for several years.
"$40 a day is too low," Labor frontbencher Bill Shorten told Nine.
"I don't think anyone can live on that and so therefore an increase is overdue and will be welcomed."
The unemployment rate has not been increased in real terms since the 1990s.
Welfare organisations, business groups and the Reserve Bank have spent years advocating to raise the rate.
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Australian Associated Press