A cashless welfare debit card could lead to prostitution, a Labor senator has warned.
Legislation to allow a trial of the card, which would hold 80 per cent of welfare payments but will not be valid to withdraw cash or purchase alcohol or use for gambling, was debated in the Senate on Tuesday.
The trial will begin in the remote South Australian town of Ceduna to assess whether a cashless card will help people escape drug, alcohol and gambling addiction.
Labor has concerns about the trials and opposition senator Alex Gallacher said people struggling with addiction would trade other goods and services.
"It may well increase, you probably need to say, prostitution and things like that," Senator Gallacher told the upper house.
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Ceduna community leaders, who co-designed the trial, visited Canberra this week to convince crossbenchers and Labor to back it.
But Aboriginal and Torres Strait Islander Social Justice Commissioner Mick Gooda has called for a hold on the trial until communities have fully assessed the proposal.
The Greens believe the card will "disempower and harm" people most in need.
Assistant minister to the prime minister Alan Tudge says additional drug and alcohol services are part of the trial.
