The government’s changes to its controversial remote work-for-the-dole scheme have been given the go-ahead by a Senate committee, despite every submission to its inquiry being opposed to the bill.

The CDP bill proposes a new compliance system in remote communities that will remove penalties for one-off breaches and focus instead on “people who are persistently and wilfully non-compliant”.

Of 21 submissions made to the committee, not one supported the legislation in its current form.

There are about 35,000 CDP participants in Australia, and 83% are Indigenous. As a condition of income support, remote area participants must engage in up to 25 hours of work for the dole, five days a week.

Submissions to the inquiry claimed the system imposed unfair work hours and flexibility on remote Indigenous participants, who also must contend with language barriers, lack of internet and phone reception, and disproportionate levels of ill health.

Penalties under the new regime are non-waivable, meaning any income lost to a breach would not be reinstated. Penalties would be based on a system of demerit points described by one Aboriginal leader as “confusing”, and would include payment suspensions of up to four weeks.

The committee report, tabled in parliament on Friday, acknowledged “the concerns expressed by some” that the measures proposed “did not constitute appropriate reform”.

However, the report said “the reforms proposed in the bill are a step in the right direction, and … are in direct response to feedback from communities”.

ANU researcher Lisa Fowkes told the inquiry almost 6,000 people had disengaged with the current scheme entirely, and might not be receiving any income. Most of those who had disengaged were under 35, representing an “intergenerational time bomb” in remote communities, Fowkes said.

The Greens oppose the bill, saying it will “make life even harder” for remote Indigenous communities.

“The idea that this is ‘creating parity’ is a nonsense,” Greens senator Rachel Siewert said.

Siewert, the deputy chair of the committee, has released a dissenting report.

“I’m deeply concerned the changes proposed are going to make things worse.

“I’m deeply concerned about the impact it’s going to have on Aboriginal communities. I’m really sorry the government has not listened to them or adequately consulted with them,” she said.

All five Labor senators on the committee, including Malarndirri McCarthy, Pat Dodson and Lisa Singh, also have “serious concerns”.

“Labor senators are troubled by the government’s failure to adequately address the very serious concerns identified,” they wrote.

They called for a “process of genuine consultation and co-design with Aboriginal and Torres Strait Islander Australians, their representative organisations and other stakeholders.”

John Paterson, representing the peak Aboriginal organisations of the Northern Territory, told Guardian Australia they were “very disappointed. This bill will still be a top down model.

“This is just the same old, same old. It’s just more punitive, and going to breach more participants. The CDP system is just confusing. We were hoping for a flexibility of design and development at a regional level.

“Imagine the mounting pressure on families there will be.”

A community advisor to Ngaanyatjarraku council at remote Warburton in WA, Damien McLean, said the current system was a “confrontational, punitive and judgmental regime” that had left many in the community unable to buy food or power cards to “keep the lights on”.