Efforts to extend cashless welfare trials into the West Australian Goldfields and Hervey Bay and Bundaberg in Queensland have passed the lower house.
The government wants to expand what it says has been successful trials of the program in Ceduna and the East Kimberley regions.
Despite opposition from Labor and crossbench MPs the bill passed 76-72 on Tuesday night and will now progress to the Senate.
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.
The rest goes in the bank and can be withdrawn as cash.
The opposition says there's not enough evidence to support a wider roll-out to the two new regions, but does support extending the existing trials until June 2019.
Labor MP Julie Owens admits there are many people who would benefit from income management programs, but not across the board.
"I would argue that perhaps it might be more sensible for a government to look at an opt-in system," she said after suggesting a community by community approach.
Liberal MP Ben Morton said Labor's dissent went against what communities in proposed trial locations wanted, and also sent a message that the cards were fine for majority indigenous communities but not others.
In the current trial locations 78 per cent of recipients are indigenous, but the new trial locations would take the indigenous participation rate to 33 per cent.
"By refusing an extended roll-out into the Goldfields and Hinkler (electorate) they are precisely saying that this card is okay for those majority indigenous communities, but not okay for other non-indigenous communities and that's shameful on their part," Mr Morton said.
Nick Xenophon Team's Rebekha Sharkie also voted against new trial sites, saying research so far found that while 27 per cent of family members said the card made their family lives better, 37 per cent said their lives were worse.
"It's one thing to have participants dislike the effects of the card upon their life and their financial freedom, but another thing entirely for their families to say the card has made the lives of their loved ones and themselves worse off," she said.
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