Official government statistics have underreported the number of sick and disabled Newstart recipients by as much as 40% or as many as 80,000 people.

Guardian Australia revealed earlier this year that Newstart recipients with partial capacity to work had reached a record high of 200,000 in December 2018 as people increasingly languish on the unemployment payment, now for an average of three years.

But new data for June 2019, released on Wednesday, provided different figures, showing 284,900 on Newstart had “partial capacity to work” in December 2018.

The figure for June increased to 289,489, of a total of 686,000 people on Newstart. It means 42% of recipients now have an illness or disability that prevents them from working full-time. In September 2014, the figure was 25% using the new figures.

Notes provided in the updated quarterly statistics report confirmed the previous data only included people who had been assessed as having a “partial capacity to work” within the past two years. This is also stated in the previous reports.

But it means sick and disabled people who have been languishing on Newstart for years but had not been reassessed in the past 48 months were excluded from the statistics.

The new statistics are significant because welfare groups have long argued changes to the disability support pension would result in a large number of people languishing on Newstart because they were too sick to work.

“It’s shocking that 40% of people on Newstart have an illness or disability,” said the Australian Council of Social Service chief executive Cassandra Goldie.

“No one can survive on $40 a day and it’s even tougher if you’re sick or have a disability. It’s heartless and negligent.”

A spokeswoman for the Department of Social Services confirmed the change but said successive governments had reported the figures in this way since 2006.

“The department routinely monitors and analyses payment cohorts and data,” she said. “The opportunity to update reporting requirements was identified as part of this business as usual activity.”

“The data has now been updated to expand reporting to those with an assessment older than two years, to better reflect the characteristics of the job seeker population,” the spokeswoman added.

“The latest published dataset includes revised historical data using the updated reporting rules.”

Officials from the department of social services clashed with the Greens senator Rachel Siewert over the underreported data at Senate estimates on Thursday.

“No matter how you dress it up, you weren’t reporting correctly,” Siewert said.

The Department of Social Services’ Nathan Williamson rejected that the previous data contained “errors”, saying the department had found a “better way, a more fulsome way” to report the statistics.

People with a partial capacity to work are considered not sick or disabled enough to be granted the disability pension as a result of the tightening of disability support pension eligibility. They are assessed as being able to work more than 15 hours a week but less than 30 hours a week.

The Howard government introduced “partial capacity to work” for people on Newstart in a bid to get more people into work and reduce spending on the more generous disability support pension.

On Monday, Guardian Australia revealed that people on Newstart were spending an average of 40% longer on the payment than they were in 2014.