Labor has revised the party’s formal position on Newstart and is now calling on the government to increase the payment, following mounting pressure from social welfare groups and after several Coalition MPs broke ranks to call for a raise.

But the party has delayed a decision on how much it should be boosted.

Amid growing calls for the government to take action on the payment, the opposition decided on Tuesday that it would refer the matter to the Senate standing committee on economics, but would call on the Coalition to review and raise the $272 a week payment.

Following a submission presented to caucus by the shadow minister for families and social services, Linda Burney, the party agreed that it would decide how much to boost the payment by closer to the next election, saying this would depend on fiscal and economic circumstances at the time.

But despite the shift in position, MPs also agreed that Labor would oppose a Greens bill to boost the Newstart payment by $75 a week, which is being debated in parliament this week, saying they wanted to consider the figure at a later date. It also said that the Senate could not pass a so-called money bill that forces an appropriation.

The Greens say the bill has been drafted in a way that does not appropriate money, and could go to the house if it was passed in the senate.

A $75 a week increase to the payment costs about $3bn a year.

Labor’s revised position comes after MPs made the case for the party to take a bolder stance on increasing the payment, and as government MPs break ranks to also call for the payment to be increased.

Before the election, Labor had pledged to conduct a review into the payment, with the intention of increasing it, but has now hardened its stance.

The party is now arguing that the government has the resources to conduct a review to determine how much Newstart needs to be increased, but is wary that any increase is not gobbled up by private or public housing rents.

“Labor calls on the government to review and increase the rate of Newstart,” Burney said. “Newstart is so low it is acting as a barrier to people finding work.”

The issue was also raised by Nationals MP Barnaby Joyce in the Coalition party room meeting on Tuesday, with the outspoken former leader saying that services such as St Vincent de Paul and the Salvation Army were being called upon because of the stress being felt by people on Newstart.

Joyce said that “people were doing it tough” and encouraged the government to consider increasing the payment.

The prime minister, Scott Morrison, told MPs that they needed to remember what they had promised in the lead up to the election, and called on them to pursue any reforms they were interested in through the party’s internal processes.