Labor senator Pat Dodson told parliament on Tuesday the plan is "racist" as it primarily targets Indigenous communities.
"This bill disproportionately discriminates against First Nations people and that means it's racist. In my mind, to support this bill is to support racism," he said.
Senator Dodson can't believe the government is pushing for the plan after saying it wants to work more collaboratively with Indigenous communities.
"This government goes on and on about how it wants to do things differently with First Nations [people] and not too them. Well, this is a hollow mantra," he said.
"This bill flies in the face of the flowery rhetoric that followed when the national agreement on Closing the Gap was signed back in July."
Labor, the Greens, welfare groups and Australia's top lawyers have urged the government to release a $2.5 million study of the scheme to show if it's working to prevent crime and substance abuse.
The government argues the card has helped communities by preventing welfare recipients from spending money on alcohol and drugs.
The cards freeze the majority of JobSeeker so cash can't be withdrawn, and money can only be spent on items deemed essential.
If the bill does not pass the current trials in South Australia, Western Australia and Queensland will end on 31 December.
The draft legislation narrowly made its way through the lower house on Monday with 62 votes to 61.
Liberal MP Bridget Archer, who has publicly rebuked the policy, chose not to vote.
Meanwhile, an Anglicare Australia survey has shown a return to the pre-pandemic JobSeeker rate could see people trying to live on $7 a day after paying rent.
Formally known as Newstart, the payment is being boosted by the coronavirus supplement, but that ends in March.
The supplement was $550 a fortnight at the start of the pandemic but has shrunk to $250, and will be further reduced to $150 from 1 January.
Before the supplement, almost three quarters of people skipped meals every week, with most missing an average of three to four meals over seven days.
Few people (13 per cent) surveyed between July and November thought their Centrelink obligations to get the dole were helping them find paid work.
Nearly four in five thought they were pointless, while around three quarters want to do Centrelink activities that are fair and lead to work.
Anglicare Australia's executive director Kasy Chambers has called for an overhaul of the system, and the rate of JobSeeker to be raised for good.
"It should be a scandal that so many people were forced to skip meals so often," she said.