Welfare groups against income management

The federal opposition's approach to welfare management is heavy-handed and won't help break the cycle of welfare dependency, community groups argue.

Opposition treasury spokesman Joe Hockey has renewed the coalition's call for all long-term unemployed and disability pension recipients to be case managed by Centrelink.

People with drug and gambling problems should also have their welfare payments quarantined, Mr Hockey suggested.

"We have to meet head-on the challenge of growing welfare dependency," he told ABC Radio on Thursday.

Liberal backbencher Kelly O'Dwyer believes all options need to be explored, saying income management was "a big idea" that needed to be discussed.

The federal government accused the opposition of playing "catch-up politics" because income management trials already were underway.

More than 16,000 people in communities in the Northern Territory, Western Australia and Queensland have their payments managed, Families Minister Jenny Macklin said.

A national roll-out was on the cards, she said.

Welfare groups say compulsory quarantining is the wrong approach.

"There is still very little evidence to say (it) actually makes a difference," Australian Council of Social Service's chief executive Cassandra Goldie told ABC Radio.

Australian Catholic Social Services executive director Frank Quinlan agrees.

"I'm a bit alarmed by this discussion that sees income quarantining as this simple and effective response," he told ABC Television, stressing that more resources were needed.

Welfare recipients on income management have 50 per cent of payments managed, and in 70 per cent of cases it involves child protection.