Pensioners, veterans and health care card holders will not be forced to pay the full rate for citizenship applications after the Senate voted to restore concessional discounts.
Earlier in the month, Home Affairs Minister Peter Dutton removed the regulation offering disadvantaged migrants discounted fees of $20 or $40.
But the Senate voted to disallow the rule change on Monday night, meaning migrants won't have to pay the full rate of $285 to apply for citizenship if they are pensioners, veterans, widows or other welfare recipients.
Greens Senator Nick McKim, who was behind the disallowance motion, said the change was trademark arrogance from Mr Dutton.
"It's a repeat of a pattern of behaviour where he tries to kick migrants or multicultural Australia in the guts and hope no one notices," Senator McKim told parliament.
Labor supported restoring concession rates, along with independent Tim Storer and the Centre Alliance.
Government minister Concetta Fierravanti-Wells said the citizenship program's costs had soared, but Australia still had lower application fees than similar countries.
She said the UK charged $1195 to apply, the US $940, while Canada and New Zealand charged more than $400 to lodge a citizenship claim.
"Only three per cent of applicants were eligible for a concession over the past year," Senator Fierravanti-Wells said.
The disallowance passed the upper house 31 votes to 30, scuttling the rule change which was set to take effect on Sunday.
