New welfare entrants would receive more in base payments to offset being excluded from household energy bill relief under a proposal by a key lawmaker.
The Turnbull government wants to cut off the energy supplement - introduced to compensate for the defunct carbon tax - to new income support recipients from September 20.
Ministers have argued it is not sustainable to continue compensating people who have not yet entered the welfare system for a tax that no longer exists.
But with Labor and the Greens vowing to block the move following its introduction to parliament this week, the coalition will need to curry favour with 10 of 12 crossbench senators to get its measure over the line.
Enter Tasmanian independent senator Jacqui Lambie, who will only support the legislation if it is amended to increase base payments for new welfare entrants.
Senator Lambie believes it fair enough to stop compensating for an abandoned tax, but says wholesale energy prices are double what they were under the carbon tax, and pensioners and welfare recipients are hurting.
"If the government rejects my proposal, it shows it cares less about tying up loose administrative ends and more about raiding the budgets of everyday Aussie pensioners, jobseekers, and students who've been doing it tough ever since the coalition broke its promise of lower energy prices following the carbon tax repeal," she said.
The government's measure, if passed, is expected to save almost $1 billion.
But the federal opposition has warned single pensioners would see their pensions cut by $14.10 per fortnight, or $365 a year, while couples would be $21.20 a fortnight (or about $550 a year) worse off.
Existing recipients will continue to receive the supplement even if the measure is passed.
