THE Federal Government will pay families up to $300 a week to temporarily house asylum seekers in their homes to help deal with the increasing flood of arrivals.

With the Immigration Department now facing a potential shortage of community housing to accommodate detainees who are being released into the community, the Government has turned to householders for help.

Under a plan slated to start next month, the Government will seek to access the 5000 homes registered under the privately run Australian Homestay Network (AHN) to host asylum seekers released from detention on bridging visas.

AHN was originally established to provide short-term private home accommodation and board for international students.

The organisation, which first approached the Federal Government with the plan last year, began writing to its national client base three weeks ago seeking applications from home owners to house asylum seekers.

The Immigration Department confirmed it would pay for security vetting and training for families which want to take up the offer.

It will also pay a weekly stipend of between $220 and $300 to families to cover food and board for detainees.

Almost 1000 detainees have been released into the community over the past two months, since the Government's change of policy last year to ease pressure on detention centres.

The high cost of the Community Placement Network plan is expected to be allocated from the existing detention centre funding, which will be revealed in next week's Budget.

The AHN, which was set up to accommodate international students for short periods in family homes, claimed the initial period of housing for asylum seekers would be for six weeks, but could be extended.

"The Community Placement Network is an initiative designed to provide short-term accommodation (for) eligible asylum seekers while they independently source longer term sustainable accommodation in the community," AHN executive chairman David Bycroft said.

"The CPN is for people interested in assisting asylum seekers to live in the community on a bridging visa while awaiting the resolution of their immigration status. It is not for people interested in international student hosting."

The Refugee Council of Australia has backed the plan, claiming it would allow more people to be released from detention and live in the community while their applications were processed.

"Mandatory detention makes people mentally ill and is expensive," the council's CEO Paul Power said.

Opposition immigration spokesman Scott Morrison slammed the plan, claiming it confirmed the Government had reached the point of desperation: "Labor's decision to house adult male asylum seekers released on bridging visas in the spare rooms of Australian families is a desperate, reckless policy from a government that has lost control.

"When Australians expressed concern about rising costs of living, this was not an invitation for Julia Gillard to supplement household incomes by offering to pay the rent on your spare room or granny flat for asylum seekers.

"The fact Australian families are now being asked to house asylum seekers who have arrived illegally by boat, including those whose claims have been rejected, shows just how desperate Labor have become over their failed border protection policies which have seen almost 17,000 people now arrive on 301 boats."

A spokesman for Immigration Minister Chris Bowen, said: "This is yet another cheap shot from the Coalition, who like to demonise asylum seeker issues."