Thousands of Queenslanders will have their Centrelink payments quarantined when a compulsory cashless welfare card is brought in next year.

The Federal Government has announced the controversial card will be rolled out across the Wide Bay region, including Bundaberg and Hervey Bay.

Under the scheme 80 per cent of a person's welfare income is quarantined on a debit-style card, which cannot be used on alcohol, gambling or to withdraw cash.

It will apply to people under the age of 35 who receive dole and parenting payments.

Human Services Minister Alan Tudge says he hopes the card would be an incentive for people to find work. ( ABC News: Eliza Laschon )

Human Services Minister Alan Tudge said the region had serious social problems the Government needed to address.

"We're concerned about the impacts on drugs, alcohol and gambling, particularly being used by families and children being neglected in the process," he said.

"At the end of the day it's not their money, it's taxpayers' money which is being provided for the basics — accommodation, food, transportation, education.

"Welfare is not provided to support an alcohol habit, a drug habit, a gambling habit."

Bundaberg, also known as the "dole capital of Australia", suffers from some of the country's highest unemployment rates.

The Government said 90 per cent of under 30s on unemployment benefits in the region had a parent who was also on welfare during the past 15 years.

Mr Tudge said he hoped the card would be an incentive for people to find work.

Under the scheme 80 per cent of a person's welfare income is quarantined. ( AAP: Dan Peled )

"Bundaberg and Hervey Bay has particularly high levels of youth unemployment and intergenerational welfare dependence… this is despite some jobs being available," he said.

"You can opt out of it [the card] by getting a job."

A similar welfare card is already in place at four remote sites across the country including Kununurra and Kalgoorlie in Western Australia.

Bundaberg will be the first urban area selected for the rollout of the card and the first site in Queensland.

About 6,700 people will be placed onto the card from the start of next year, for a 12-month arrangement, but other people can volunteer to be part of the scheme.