The families minister, Mal Brough, is looking at a new way to get tough on parents who spend child-welfare payments on drugs, alcohol and gambling.
Mr Brough is examining a plan that would automatically direct up to a third of welfare payments towards household essentials.
But the executive director of Catholic Social Services Australia, Frank Quinlan, says Mr Brough is overreacting to what is a small problem.
"If people have gambling problems, then let's ensure that gambling programs are funded adequately. If people have alcohol and drug problems, then let's ensure that alcohol and drug programs are funded adequately."
He says: "These are successful programs provided by the community-services sector. They should be supported for people regardless of whether they're low-income earners or high-income earners."