Fines imposed on welfare recipients in a controversial work-for-the-dole scheme have soared to 300,000 in under two years, prompting renewed claims of poverty and hunger in Aboriginal communities.

Key points: The 35,000 CDP work-for-the-dole recipients incurred more penalties than the rest of Australia's welfare system

The 35,000 CDP work-for-the-dole recipients incurred more penalties than the rest of Australia's welfare system Recipients fined when they are late or miss activities

Recipients fined when they are late or miss activities Indigenous Affairs spokesman said each penalty is small, about one-tenth of fortnightly payments

Jobless people in remote Australia must work up to three times longer than other unemployed people to receive benefits.

The overwhelming majority of participants in the Community Development Programme (CDP) are Aboriginal.

The latest figures reveal about 54,000 financial penalties were slapped on participants in January, February and March alone for missing activities or being late.

"It's extraordinary," Australian National University researcher Lisa Fowkes said.

"Those 35,000 people have incurred more penalties than all of the 750,000 other Australians in the social security system.

"There is something really seriously wrong with the program, and that's showing up in these figures."

Unemployed people under the CDP must work 25 hours a week to receive welfare payments.

Activities in the program include hygiene classes, t-shirt dyeing and art making.

Ms Fowkes said fines under the "discriminatory" scheme were worsening poverty in "some of the poorest communities in Australia".

"We're certainly hearing a lot of reports from remote communities of people going hungry and increased pressure on families as they try to feed their kids with less and less money," she said.

"People [are] suffering hardship, getting behind in their rents, incurring debts because of the fines that are stacking up under this scheme."

Most of the fines during the March quarter were short-term penalties, which are generally about $50 per breach, while more than 7,000 people were cut off from welfare payments for up to eight weeks.

'Penalties only applied when warranted'

Indigenous Affairs Minister Nigel Scullion was unavailable for interview but a spokesman sought to play down the fines.

"While the number of penalties applied may appear large, the amount of each penalty is small — equal to one-tenth of their fortnightly payments," he said in a statement.

"There are also strong protections in place to make sure penalties are only applied when they are warranted.

"The purpose of the compliance framework is to encourage attendance at CDP activities.

"These activities are about helping jobseekers get into work or to contribute to their communities."

Mr Scullion said he was consulting about potential changes to the scheme.

Last month, Australia's peak union body escalated its campaign against the program by launching the First Nations Workers' Alliance for Indigenous CDP participants.

A Senate inquiry and the independent federal government watchdog, the Australian National Audit Office, are currently investigating the program.