More than 118,000 would-be Australian citizens are waiting for their applications to be processed by immigration department officials.
In the past six months there have been two spikes in application numbers, which coincided with attempts by the government to impose tougher rules and last week's Senate rejection of the changes.
"There was kind of a plateau which was lower compared to 12 months ago; and then, since the announcement last week, there's been another surge," immigration department official Christine Dacey told a Senate estimates committee on Monday night.
Liberal senator James Paterson said it was not surprising that when people hear about changes in the immigration system they seek to exploit more favourable rules.
"Personally, I think the changes proposed by the government are absolutely necessary," he told reporters in Canberra on Tuesday.
"I hope the Senate will reconsider them in some form."
Labor senator Jenny McAllister said it was terrific that potential Australians were taking the opportunity to become citizens.
"The government's attempts to limit the ability of permanent residents to sign on to 'Team Australia' ... was extraordinarily misguided policy," she said.
"I'm very pleased that it has been ditched."
