A$50 thousand was given to the wives and families of the 13 suspects, who are in jail on terrorism charges.
But the chairman of the Prime Minister's Muslim advisory Board, Ameer Ali, says the men are innocent until proven guilty and their families do not deserve to be punished in the process.
He says the government has no right to question Islamic community donations unless there is a reason to believe the money is being used to fund terrorism.
”These are speculations. Well where is the evidence? Of course if there is clear evidence that this money is being put towards terrorism and some violent activity, then some action must be taken. But until such a thing is proved, I think they have a legitimate claim on the charitable funds collected by the community. That's how I look at it,” said Mr Ali.