Centrelink will change the way it backdates payments from July 1.
Under the current system, a person is able to claim backdated payments from the date they contact Centrelink about becoming a NewStart recipient.
They are then given a window of five months to submit the relevant paperwork and are able to recoup payments over that time once they are an approved recipient.
But from next month, people will only be able to claim backpayments from the date they submitted the claim.
They will need to complete their claim documents within 14 days on making an intent to claim.
Denison independent MHR Andrew Wilkie on Tuesday asked Prime Minister Malcolm Turnbull asked whether he would stop the change.
“People who need Centrelink support are often in crisis and can’t lodge the paperwork immediately, for example, women fleeing domestic violence, people suffering debilitating illnesses, and carers,” he said.
Mr Turnbull said the policy change was part of the social services welfare reform bill which was passed by Parliament in March.
He said Mr Wilkie did not speak in the debate but voted against it.
Mr Wilkie later said regardless of whether or not the policy had parliamentary approval, it was still an unfair reform that would affect people in crisis.
There were 662,000 NewStart claims processed by Centrelink in 2016-17; a decline from the 696,000 NewStart claims processed in the previous financial year.
The average NewStart payment for a single person with no children is $538.80 a fortnight.