Meanwhile employment agencies are working to transition more locals back into employment before the additional payment ceases entirely.
The Federal Government announced recently the supplement for unemployed Australians, initially set to stop on January 1, would be extended to the end of March next year.
But from December, it will be shaved by $100 - cutting it down to a payment of $150 on top of existing JobSeeker payments.
Prime Minister Scott Morrison said the measures were designed to "graduate" people from an economic support that has been essential during the pandemic.
But Mooroopna Vinnies conference president Margaret Campbell said the payment cuts did not bode well for people already struggling to make ends meet.
"We have huge social issues in Shepparton, and that's only going to get worse with the supplement going,” Ms Campbell said.
"This payment has helped keep many people afloat during this tough time.”
Ms Campbell said the local Vinnies had seen need grow during the pandemic, with the assistance centre increasing its opening hours from two to four days to meet demand.
She said many residents were struggling to pay rent, with people from refugee and asylum seeker backgrounds and those escaping family violence particularly vulnerable.
"Some people organised with their landlords to pay rent at a reduced rate during the pandemic - but now their landlords are asking for back-payments,” Ms Campbell said.
"When people are struggling, they live hand to mouth.
"And the COVID-19 supplement reducing only creates another problem.”
While Families and Social Services Minister Anne Ruston said the government aimed to encourage people to re-engage with the workforce, Ms Campbell said it was not that easy.
"The government seems to believe there's a lot of work around. But there isn't,” she said.
"Yes, harvest work has started, but not everyone is physically able to do it.
"Others are applying for jobs but there are four to five applicants, so if they're unskilled, they drop to the bottom of the list.”
Madec team leader Mercades Bentancourt said the employment agency had helped "huge numbers" of people transition back into employment, including 90 clients last month.
And with the coronavirus supplement set to disappear, she said the Shepparton agency was already putting measures in place.
This includes educating employers on the assistance available, such as job subsidies, to help them take on unskilled workers.
“A lot of local employers look for experience, as they may not have the resources or the funding to assist with upskilling on the job,” Ms Bentancourt said.
When the COVID-19 supplement first came in, Ms Bentancourt said it provided a safety net for many locals struggling financially.
But while a small portion of the Madec caseload wanted to work, she said many people also feared working during the pandemic.
“It made it hard to fill local positions,” she said.
“But as time went on, things settled down and people became more aware of the new COVID normal.
“We’ve seen many more people feeling secure and safe to return to work.”
With March looming, Ms Bentancourt said Madec was doing its best to create new jobs and put preventions in place.
“We’re doing pretty well at the moment,” she said.
“We’re aware a few clients may struggle to find employment when March comes around.
“But that may be because of the flow-on effects of COVID, such as mental health.
“But we are here to support them in addressing those barriers and help them with the transition into employment.”