The Turnbull government's bid to extend its cashless welfare card trial appears doomed even though Social Services Minister Dan Tehan remains upbeat about convincing the Senate.
Legislation to extend the trials into the West Australian Goldfields and Hervey Bay and Bundaberg in Queensland passed the lower house on Tuesday night.
But Nick Xenophon Team MP Rebekha Sharkie voted against the measures and indicated her Senate colleagues, who form a crucial voting bloc, would do the same.
Under the scheme, 80 per cent of a welfare recipient's income is loaded onto a non-cash debit card which cannot be used to gamble or buy alcohol.
Ms Sharkie raised concerns that research on trials in Ceduna and the East Kimberley regions found that while about a quarter of family members said the card made their lives better, nearly two in five said their lives were worse.
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The minister pointed to other figures in the research showing reductions in drug and alcohol use by those who had their welfare payments quarantined.
"The discussions that I've had with the crossbenchers up to this stage have been incredibly friendly, incredibly warm and incredibly constructive," Mr Tehan told ABC radio on Wednesday.
"We're going through the reports and the research and demonstrating what has been the outcomes."
NXT and Labor have offered a compromise of a year's extension for the existing trials so there is more time to prove the program works.
Labor senator Jenny McAllister said evaluations so far did not give any grounds to extend the trials to new communities.
"We're not willing to see it extended to other communities without the evidence," she told reporters.
However, the Greens say this is not the way to deal with serious issues of addiction and disadvantage in indigenous communities and more focus must be given to underlying causes and ensuring long-term services.
"The cashless welfare card causes grief and pain to its participants," the party's community services spokeswoman Rachel Siewert told reporters.
The informal Senate crossbench voting bloc of David Leyonhjelm, Fraser Anning and Cory Bernardi last night met with Mr Tehan to discuss the matter, which they support.
Senator Leyonhjelm told reporters he remains unconvinced that the two Nick Xenophon senators will follow the lead of Ms Sharkie.
"She seems somewhat more inclined to line up with the Greens than they are," the Liberal Democrat said.
