Emergency relief payments to young people who are cut off from unemployment benefits under changes in the federal budget will be partly funded by the money saved from not paying them the benefits, Senate estimates has heard.



The treasurer, Joe Hockey, said the payments to up to 500,000 under 30-year-olds during the next four years – were part of the government's "huge" safety net.



In the budget, the government announced young unemployed people would be denied benefits for six months if they were not in training or studying. Some people, such as single parents, would be exempt.



The Department of Social Services told the estimates hearings on Wednesday that the emergency payments for essentials such as food and bills could be available to under-30s cut off from the dole.



On Thursday Labor and Green senators tried to find out where in the budget the extra emergency payments would come from, and were told they would come in part from the $1.2bn being saved from payments in Newstart and Youth Allowance.



“This confirms that the Abbott government knew full well its plans to cut young people off Newstart would push them into serious hardship,” said the opposition families spokesman, Jenny Macklin.



“In fact, the government has included an allocation in the budget to cover the extra costs of emergency relief it believes will result from the changes in this budget.

"But the government’s claim that this is new money is false. In fact, the department confirmed that this is just recycled money from the savings that will be generated by cutting young people off Newstart and Youth Allowance.”

Asked about the emergency payments on Sky TV, Hockey said the government was “putting a huge number of safety nets in place, we hope none of the safety nets need to be used, but we are not going to leave people to fall to the bottom without a chance to get back.



“If we are more careful with the way that we spend welfare dollars, taxpayers’ dollars, if we’re more careful with it then we can be more helpful to those who are more vulnerable but at the same time ensure that people can get off welfare, and that’s exactly what we’re doing.”



The opposition leader, Bill Shorten, said the emergency payments were “the policy equivalent announcement of saying – give every passenger a parachute because they know the plane can't fly or may be in trouble".



And the Greens senator Rachel Siewert said it showed the government knew the budget policy would cause hardship.

If the government can win Senate support for the policy – which on the currently stated positions of the opposition parties would seem unlikely – an estimated 60,000 people could lose payments. Some could lose out for as long as 11 months if they are subject to multiple waiting periods, for example because they miss appointments.

