A Centrelink "robo-debt" trial targeting vulnerable people, including those with mental illnesses, will be put on hold while it is investigated.
Human Services Minister Michael Keenan promised to put the trial on hold after reports it was sending debt notices to people listed as vulnerable.
"Considering the vulnerabilities of some people that do owe us debts, I've asked that the trial we have conducted here is put on pause," Mr Keenan told parliament on Wednesday.
"(That's) while we make sure that when we go to recover these debts we are doing it in the most sensitive way possible.
"That trial will not proceed until I am satisfied that is the case."
Labor human services spokeswoman Linda Burney said the previous version of the robo-debt program had seen at least 20,000 Australians wrongly hit with debts.
"This is a particularly cruel expansion of robo-debt," she said.
"People in these circumstances are more likely concerned about their personal welfare than where they have filed their pay slips."
Greens senator Rachel Siewert wants to know if the trial was suspended only after the community found out about it.
She said the government had targeted struggling people to claw back debts.
"Just when you think they couldn't go any lower, they sink to the depths of targeting the most vulnerable members of the community," Senator Siewert told the upper house.
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