The Turnbull Government's Indigenous work-for-the-dole scheme has slapped more than 350,000 fines on participants in just two years.

The Community Development Program (CDP) forces unemployed people in remote locations to work up to three times longer than city-based jobseekers to receive welfare.

CDP activities are compulsory for about 15,000 people, most of whom are Indigenous, with financial penalties imposed for missing activities or being late.

New figures reveal about 53,000 sanctions were issued during April, May and June last year.

"[People are] being listed as failures by being penalised and having their income lessened or removed," Australian Council of Social Service (ACOSS) president Tony Reidy said.

"That has a severe impact on people as human beings."

CDP participants received more fines during the three-month period than every other jobseeker in Australia combined.

ACOSS said CDP is flawed and must be abandoned.

"It's illogical and it's being applied incorrectly," Mr Reidy said.

"Thousands of those people are going without much-needed income support, sometimes for days or weeks, because of the program."

In the two years to July 2017, remote unemployed people were breached on 69,942 more occasions than people in the nationwide Jobactive program.

Jobactive has hundreds of thousands of participants.

'Passive welfare model would be devastating'

Indigenous Affairs Minister Nigel Scullion is on leave, but a spokesman defended the system.

"It is important to note that penalty amounts are low and the number of people penalised is also low," he said in a statement.

"The passive welfare model that ACOSS and other groups would have us implement would be devastating.

"We have heard consistent support for mutual obligation requirements."

For a person on a Newstart payment, which is generally under $300 a week, penalties are about $50 per breach.

Centrelink recipients can also be cut off from payments for up to eight weeks if they repeatedly miss appointments.

During the June quarter, 7,868 eight-week penalties were applied to CDP participants.

A Labor-Greens dominated Senate committee recently found the scheme is driving communities further into poverty.

The report called for work hours to be reduced, eight-week suspensions be scrapped, and work-for-the-dole activities to attract the minimum wage.