Welfare income management to continue

Income management will continue for two years after the Senate passed legislation to extend the program.

Mitch Fifield Source: AAP

The government will continue to restrict what vulnerable Australians can buy with their welfare payments for another two years.

A bill to extend income management, under which a percentage of a person's welfare is managed by Centrelink, passed the Senate on Monday night.

Income management can be voluntary or the result of a referral from certain agencies, like child protection services, and means funds must be spent on essentials like rent, bills and food.

The government says the program protects vulnerable children who could miss out on their basic needs.

Child protection and voluntary income management will be extended to the greater Adelaide area after a coroners inquest into the death of four-year-old Chloe Valentine recommended its implementation.

Chloe died in 2012 after she repeatedly crashed her motorbike and her parents failed to get her medical attention.

Families SA had received multiple notifications about her.

The Australian Greens say evidence from the Northern Territory shows income management doesn't work.

The bill also abolishes financial incentives for people on income management, including a savings-matching scheme and a payment for staying on the program from six months.

Those incentives were under-utilised, expensive to administer and encouraged a dependence on income management, Assistant Social Services Minister Mitch Fifield said.

It also scrapped government subsidies paid for seven days to nursing homes to hold a place for elderly people and abolished the now defunct aged care planning advisory committees.

The Greens are concerned scrapping the pre-entry week meant elderly people wouldn't have time to adjust to their new living arrangements.

"Forcing an unreasonable timeframe onto transitioning older Australians into care will add unnecessary stress and trauma," Greens senator Rachel Siewert said.

Nationals Senator Bridget McKenzie said being looked after when you aged was no longer an automatic entitlement and the bill aligned the laws with the way older people were living.

"Seventy is the new 50," she told the Senate.

"They're travelling like never before, they're spending their childrens' inheritance like never before and they want choice in how they age like never before."