The Morrison government has announced an extra $50m for the charity sector to help people affected by bushfires and $8m to double payments for children under the age of 16, after welfare groups complained that current assistance was “inadequate”.

The package of assistance, which will come from the government’s $2bn recovery fund, will be used for food vouchers, financial assistance and support services to be administered by the charity sector and made “immediately available” to those affected.

Emergency relief funding for communities directly affected by fire will be increased by $40m with the extra funds able to be used for a broad range of basics including utility bills, clothing, petrol and bus tickets.

“In recognition of the crisis situation, this relief will also be made available as cash payments when necessary to help cover emergency costs for people who work or live in affected areas,” the government said in a statement.

On Wednesday Scott Morrison told reporters in Canberra the government will also double family assistance from $400 per child to $800 per child. Funding is available for people who are badly injured, have lost a family member or if their home has been badly damaged or destroyed.

In a statement the government estimated the cost at $8m for nearly 20,000 children, although Morrison earlier said the government would pay “as much as it takes”.

Morrison also promised to simplify the process for volunteer firefighters to claim up to $6,000 in lost income. Claims of $200 per day or less will be processed without substantiation while those seeking up to the full $300 per day will be asked for evidence such as payslips or tax returns, he said.

The extra $40m will be primarily administered by the Salvation Army Property Trust and the St Vincent de Paul Society, which collectively provide services across the affected areas.

The government said these organisations would work with locally-based organisations “to ensure access for communities in need”.

Another $10m will be allocated to the expansion of financial counselling services, including extra support for the National Debt Helpline and increased funding for locally-based providers to deliver face-to-face services, including through outreach.

The government is also promoting “safe” financial products that are not available through mainstream organisations for people on low incomes as an alternative to high-risk, high-interest products.

These include the No Interest Loans Scheme and StepUP, a low-interest loan scheme, available through Good Shepherd Microfinance.

The prime minister, Scott Morrison, said the $50m package would also help to stimulate bushfire-affected communities, while also helping people “to get through the coming days and weeks”.

“I know many Australians are doing it really tough, they’ve seen their homes and livelihoods destroyed or damaged by these devastating fires,” Morrison said ahead of Wednesday’s announcement.

“For many people right now it’s the basics that count. We need to make sure everyone has food on the table and clothes on their backs.”

The social services minister, Anne Ruston, said financial counselling would help people “get back on their feet quickly”.

“As affected Australians count the personal toll of these devastating fires we want to make sure they have support to plan and rebuild their lives,” Ruston said.

Earlier on Wednesday Labor criticised the process for delivery of disaster relief funding.

Opposition leader Anthony Albanese said people need “a single point of entry” and should not have to deal with “red tape and bureaucracy in order to get the support that they need”.

On Monday, the country’s peak welfare body, the Australian Council of Social Service, called on the federal government to boost emergency payments, increase Disaster Recovery Allowances, provide $30m in food aid, and provide additional relief for people on low incomes who could not afford insurance.

The government has been making a series of announcements about how it will spend its $2bn recovery fund following announcements on Tuesday of $50m for wildlife recovery and $100m for fire-affected farmers and primary producers.