Controversial plans to drug test unemployed welfare recipients will be suspended indefinitely after the Senate refused to endorse the trial.
The Turnbull government had hoped to drug test 5000 Newstart and Youth Allowance recipients across three trial sites in NSW, Queensland and Western Australia from January.
But Social Services Minister Christian Porter indicated on Wednesday provisions for the pilot will be stripped from an omnibus welfare bill and dealt with separately, so other measures can be signed off before Christmas.
"There are some difficulties that are going to be presented in getting that part of the bill through the Senate, but that does not mean that we are abandoning drug testing," Mr Porter told Sky News.
"No one can be perfectly certain with these things but my best assessment is the rest of it, everything other than drug testing, will likely succeed through the Senate."
Labor and the Greens oppose the drug tests despite broad support among voters, arguing they would demonise welfare recipients.
Last minute negotiations with crossbenchers, whose votes were critical to getting the trials over the line, failed to bear fruit.
Doctors and community groups have also been deeply critical of the drug tests, arguing they would prove an expensive, paternalistic and potentially damaging waste of time.
"You may call it paternalistic but so what if it works and it produces jobs and employment and improves people's lives," Mr Porter said.
Under the government's plan, anyone who tests positive would have been shunted onto cashless welfare cards, while those who fail more than once would be referred to medical professionals for treatment.
The drug-testing trials will be put on ice for at least several months, as enabling legislation will probably have to wait until parliament returns in February.
The remaining omnibus bill, which is likely to pass, introduces a demerit point system for people who persistently dodge job-seeking obligations, tightens exemptions around substance dependence and folds seven different payments into one.
