An income management scheme will be introduced in remote Aboriginal lands in South Australia's outback next month.

The $3.8 million federal scheme on the APY Lands includes voluntary and forced quarantining of welfare payments.

The move comes after senior women on the lands called for the measure to stop domestic violence, child abuse and neglect.

The Aboriginal Affairs Minister Jenny Macklin says the scheme will isolate a proportion of individuals' welfare payments for food, housing and bills.

"If people are volunteering for income management then 50 per cent of their welfare payments can be put on to a BasicsCard which works just like an EFTPOS card," she said.

"That money can then only be spent on the basics, such as food, rent, clothing. It can't be spent on alcohol."

Ms Macklin People on the APY Lands will be able to volunteer for the scheme but others will be referred by child protection authorities and Centrelink.

"If child protection authorities refer people for income management, 70 per cent of their welfare payments can be put on to the basics card."

Ms Macklin says the scheme will be rolled out over the next two years and will reduce the practice of 'humbugging' in which people are forced to share earnings with family members.

"That money will be spent on making sure that we do have Centrelink staff who are able to support people on the lands, also support for the stores and the system of BasicsCard," she said.

"It will help people where there's evidence for example that people are unable to meet their rent payments and are in danger of eviction.

"It can be helpful for Indigenous and non-Indigenous Australians to make sure that they're able to spend their welfare money on the things that are needed for their children."

Welfare to work

The announcement comes after the NPY Women's Council requested an income scheme earlier this year.

Andrea Mason from the council has welcomed the scheme but wants it to extend from those receiving welfare to people in work.

"As people in communities see what benefits are being provided to other people in their family, people on income in some way will push for that provision, whether it's through their employers or calling for the Government to provide them with that opportunity," she said.

South Australian Greens MP Tammy Franks agrees, saying it is discriminatory to treat people who are on Government benefits differently to those who are in paid employment.

"Something needs to be done on APY lands but I think they may be missing the point. Those most vulnerable are, in fact, those trying to get into paid employment or trying to hold down a job, particularly the women," she said.

"They're the ones who've been asking for some sort of voluntary quarantining of income or income management scheme.

"There are people who are in paid work and that's what we want to increase. So let's support those people. That's the way forward for the APY lands."

Local storeowner Kirsten Grace says while the scheme will help families out of work, it may discourage those looking for work.

"What we find is that, for example, mechanics courses which people in communities are fabulous mechanics, but they just don't want to become formally trained because then they become a victim of humbug, because everybody wants them to fix their cars for them," she said.

"It's basically trying to protect people when they're trying to take the initiative of work."

Compulsory

Ms Macklin has defended the decision to make the scheme compulsory for some people, saying it will make life easier for those involved.

"Compulsory income management now applies in many parts of Australia and certainly it has found to be helpful," she said.

"The evidence shows that people who really need it are those with very limited incomes, fixed incomes, people who are dependent on welfare. People who are on wages are more able to meet their needs and get control of their money.

"We're implementing a similar approach in other parts of Australia, in Playford in South Australia and some other places on the east coast."

Ms Macklin says it complements other measures already implemented and follows the introduction of a similar scheme in Western Australia.

"We have introduced other changes as well to help people manage their money. We've introduced weekly Centrelink payments... We've put in place additional financial counselling services."

Earlier this year, Melbourne University professor Marcia Langton supported calls for an income scheme, describing the situation on the lands as "like Darfur without the guns."