The Sydney Morning Herald reports that the woman had her welfare payments cut off for eight weeks but was not given any extra financial help because she was not considered "vulnerable" under welfare laws.
Welfare groups say the case is more evidence that the new welfare system is too harsh, and the woman has taken her case to the Social Security Appeals Tribunal.
The Vice-President of the National Welfare Rights Network, Kate Beaumont, said: "The Government has got its policy antennae in a mess when they cut all payments from a woman with an unborn child yet shower her with a $5000 baby bonus when the baby is born."
"The failure of the guidelines to recognise the need to provide financial support to a pregnant woman creates a serious hole in this safety net," Ms Beaumont said.
"We urge the minister to revisit the rules so that pregnant woman and unborn children are not placed at risk."
Under the new laws, welfare payments can be cut off for eight weeks if recipients breach certain job search rules. People can be offered financial case managers to make sure they have enough money for food, bills and medical expenses if they are found to be extremely vulnerable. This includes people with dependent children or people who need medication.
The young woman, who lives in regional NSW, was receiving the youth allowance payment but it was suspended after she breached the requirements.
The Government faces near universal criticism from welfare and church groups over the rules in place since 1 July last year.
Catholic Social Services, the St Vincent de Paul and numerous other welfare groups have refused to participate in the program.
Woman denied benefits and extra aid during pregnancy (Sydney Morning Herald 23/1/07)
LINKS (not necessarily endorsed by Church Resources)
Pregnancy photos (ivillage) Catholic Social Services Australia
Catholic Social Services challenges Labor on commitment to poor (CathNews, 22/8/06)
Triple whammy for low income households: CSSA (CathNews 3/8/06)
Low unemployment should pave way for training places: CSSA (CathNews 14/7/06)
New welfare-to-work rules spell disaster: Catholic Social Services (CathNews, 3/7/06)
Catholic Social Services baulks at cooperation with harsh policy (CathNews 7/6/06)
Catholic Social Services welcomes falling unemployment (CathNews 26/5/06)
Vinnies says "no" to Govt money (CathNews 6/4/06)
24 Jan 2007