Truant indigenous children and their parents in the Northern Territory will be hauled before school officials and Centrelink before welfare is cut off, the federal government says.
The government announced a family conferencing plan that aims to have Centrelink officers directly involved in getting kids to schools.
If school attendance does not improve parents will have welfare payments suspended as a last resort.
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"It's going to make the job of teachers so much easier if they don't have to run around and chase up kids," School Education Minister Peter Garrett told ABC Television.
Special circumstances would be taken into account.
Family conferencing is used by Cape York indigenous leader Noel Pearson in far north Queensland.
"We think it's necessary to do this," Mr Garrett said, adding non-attendance rates were "very high".
He dismissed criticism the idea was discriminatory.
"I've spent time sitting down with communities to see what additional steps we need in place so we don't have a generation of kids who don't have a decent education," he said.
The Gillard government is expected to introduce legislation to parliament next week.
Indigenous Affairs Minister Jenny Macklin said trials in some communities had been successful in improving school attendance.
"The evidence is really coming from Aboriginal people themselves," she told ABC Radio.
"I've heard from people they want to do everything possible to get kids to school."
It was the job of parents to get kids out of bed and into school, but if that was not happening more support was needed, Ms Macklin said.
Family conferencing would address any underlying issues such as bullying.
Ms Macklin said a jobs package was also on the agenda and would create 50 ranger positions and new traineeships.
Opposition education spokesman Christopher Pyne welcomed the school-attendance plan.
"The government is heading in the right direction," he told Sky News, adding the consequences were dire for young indigenous children if they did not attend school.
"Their futures would be very bleak indeed."
All the opportunities to improve standards of living, employment and decent housing were linked to early education, Mr Pyne said.
