Drug testing welfare recipients is not a good use of taxpayer money, the Australian Council of Social Service says.
Instead, senior policy and advocacy officer Charmaine Crowe says the money would be better spent on treatment services for addicts.
A Senate committee is hearing from experts on legislation to trial welfare drug tests across three sites in NSW, Queensland and Western Australia.
The trial would target 5000 Newstart and Youth Allowance recipients.
One positive drug test would result in a person being placed on income support for two years, while two positive tests would result in the person being referred for treatment.
Refusing to take a test will cost a person four weeks of their payments.
"It's absolutely not an effective use of taxpayer dollars according to all of the evidence we have come across," Ms Crowe told the committee in Sydney on Monday.
"The money that is spent on this trial would be far better spent on treatment services for people with addiction in Australia."
Her WA counterpart Chris Twomey - who is married to WA Greens senator and committee member Rachel Siewert - echoed that sentiment.
He said international trials had resulted in few positive tests, pointing to New Zealand in particular, where 0.27 per cent of tests were positive.
That made it an expensive policy for small results, he said.
"Given that we've got unmet demand which is two times the number of services we're providing, focusing on more services and putting more money into effective job creation would have much stronger outcomes," he said.
The committee also heard the trial could punish those already seeking help.
Royal Australian and New Zealand College of Psychiatrists president Kym Jenkins said one of her concerns was that a positive drug test was only evidence of a positive drug test and not of where the person is in a treatment process, their personal history or clinical wellness.
"That positive drug test in this setting or in this trial may then be doubly punitive if somebody is getting better and their welfare payments may be withdrawn," she said.
The controversial policy was taken out of wider welfare reform legislation that passed parliament earlier this year.
It was reintroduced on its own in February and is currently before the House of Representatives.
