The letter delivered on Friday describes as ''deeply disturbing'' reported plans to push a further 100,000 sole parents off parenting payments and on to Newstart when their children turn eight.

"ACOSS has supported your government's commitment to a surplus for good reasons," council chief executive Cassandra Goldie writes in the letter. "However, a surplus is not an end in itself. I urge you not to proceed with payment cuts to parents on income support looking for paid work."

Australians who have become sole parents since 2006 already lose the parenting payment when their children turn eight. But a "grandfathering" provision legislated by the Howard government means the families who were already on the payment in 2006 get to keep it until their youngest child turns 16, whenever that child is born. "It means a family could still be grandfathered in another 16 years time if they have another child tomorrow," a government source said.

"An otherwise identical family living next door with a child born the same day would only get the payment for eight years."

In her letter, Dr Goldie says the proposed January 2013 shift to Newstart would do "nothing to improve people's job prospects". "These parents are already required to seek part-time employment. It will only make these families poorer, which means they are less able to have the stability and resources they need to help them find a paid job," she says.

The single parenting payment is worth up to $46 a day. Newstart for a single parent is only $38 a day. The Organisation for Economic Co-operation and Development has found that two-thirds of children in families on Newstart live in poverty.

In a separate statement released this morning more than 100 organisations call for the government to lift Newstart, arguing it "is simply not enough for people to live on and is hindering their efforts to find paid work". The signatories include Anglicare Australia, the Australian Council of Trade Unions, the Council on the Ageing, Homelessness Australia, the Human Rights Law Centre and YWCA Australia.

It says more than 575,000 Australians live on a Newstart allowance as low as $35 a day. About 60 per cent of them have been on it for more than a year.

Deloitte Access Economics expresses concern about the proposed move to budget surplus in a report released this morning but says it is not as concerned as it was a few months ago.

"In late 2011 it looked as if the search for a 2012-13 surplus might become a really bad idea," the report says.

"Europe was fading fast. The good news is Europe's woes have become a little less dire since then. We have always been big supporters of budget repair - it can take pressure off interest and exchange rates. However, all that is already happening regardless of whether there's a surplus in 2012-13.

"The debate is simply over whether the budget needs to improve by $33 billion or $38 billion. Only the latter delivers a surplus. And we can't say we're convinced of the wisdom of that final surge: the final $5 billion."