Welfare recipients can use their cashless debit cards in brothels and to buy pornography, a Senate hearing has been told, with the Morrison government explaining the cards have been designed to be "as non-interventionist as possible".

Department of Social Services officials told Senate estimates that cashless debit cards could be used to pay for "legal sex services" with no restrictions on the kinds of those services.

Cashless debit cards cannot be used for alcohol or gambling, but legal sex services are allowed. Credit:Steven Siewert

Cashless debit cards - which are being trialled in four communities around Australia - are designed to ensure people spend their welfare on essential items like bills, shopping and clothes. The cards quarantine 80 per cent of payments onto a bank card which prevents spending on alcohol, gambling, some gift cards and cash withdrawals.

When asked to explain why cashless cards could be used for sex services, a spokesperson for Social Services Minister Anne Ruston said the cashless debit card was a "tool to help reduce the social harm caused by welfare-fuelled drug and alcohol misuse and problem gambling".