Australians claiming to be Aboriginal would be forced to undergo DNA testing under a One Nation policy designed to stamp out welfare fraud.

One Nation's New South Wales leader Mark Latham has taken aim at people who identify as indigenous, when they are not of Aboriginal heritage.

'Everybody hates a welfare rorter, especially in Aboriginal affairs,' he said.

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Australians claiming to be Aboriginal would be forced to undergo DNA testing under a One Nation policy designed to stamp out welfare fraud (pictured is One Nation leader Pauline Hanson, left, with the party's New South Wales leader Mark Latham)

'Australians are sick and tired of seeing people with blonde hair and blue eyes declaring themselves to be indigenous, when clearly they have no recognisable Aboriginal background and are doing it solely to qualify for extra money.'

Mr Latham has proposed a law which would require Aboriginality to be determined by a DNA test showing someone has at least one full-blood Aboriginal grandparent, ending a system where Australians can self-identify as indigenous.

Effectively, it would prevent welfare payments going to those who are less than 25 per cent indigenous.

The Greens have described One Nation's DNA testing policy as 'blatant racism'.

In Australia, people can identify as indigenous to be given special treatment when applying for jobs in the public service or the ABC, as part of an affirmative action policy designed to promote one minority group.

They also qualify for special benefits, including Abstudy to fund university study or an apprenticeship, and can join an Aboriginal land council.

An indigenous Abstudy recipient gets $550 a fortnight once they turn 22, which is $95 more than a non-Aboriginal student on Austudy.

Over a year, an indigenous student gets $2,470 more from taxpayers and is also eligible for a $4,553 relocation allowance to study.

Mr Latham said many indigenous people lived in poverty (Maningrida community in Arnhem Land pictured) as people claimed Aboriginal status to get welfare benefits

'The system of indigenous self-identification, declaring Aboriginality without any bloodline or DNA proof, has been open to widespread abuse,' Mr Latham said.

Indigenous welfare entitlements Indigenous students younger than 22 on Abstudy get $455.20 a fortnight, the same as similar Austudy recipients with no children or a partner. Abstudy payments rise to $550.20 a fortnight once they turn 22 . This is $95 more than an equivalent Austudy payment of $455.20 for single, non-indigenous students without children. This fortnightly gap adds up to $2,470 a year. Fortnightly Abstudy rates rise to $595.10 for indigenous students over 60. Benefits are paid during semester breaks, provided someone remains enrolled, and only fall if a recipient earns more than $437 a fortnight. Indigenous students relocating for their study from a regional or remote area are entitled to a $4,553 payment for their first year of study. Source: Department of Human Services and Department of Social Services Advertisement

'It is being used as a fraudulent way of cashing in on welfare benefits, special Aboriginal programs and land council largesse.'

Mr Latham said genuine indigenous people continued to live in poverty as people with little or no indigenous heritage claimed taxpayer-funded benefits.

'Any waste of taxpayer funds in this area is highly disrespectful to genuine indigenous,' he said.

'It weakens the integrity of their racial group and takes money away from people in genuine need.

'We believe in an honest and fair welfare system.

'First Australians deserve the respect of stopping rorters and opportunists from masquerading as indigenous.'

While indigenous recognition is largely a federal issue, the NSW public service has an Aboriginal employment strategy and administers indigenous land councils.

The Greens' spokeswoman on Aboriginal and Torres Strait Islander issues Senator Rachel Siewert described the One Nation policy as 'blatant racism'.

'It should be called out as such,' she told Daily Mail Australia on Monday.

'But it's what you can expect from One Nation who are using shock tactics to get attention.'

Mr Latham has proposed a law which would require Aboriginality to be determined by a DNA test showing someone has at least one full-blood Aboriginal grandparent (pictured as Aboriginal men at Alice Springs in central Australia)

As federal Labor leader in 2004, Mr Latham backed then Prime Minister John Howard's dismantling of the Aboriginal and Torres Strait Islander Commission.

Almost 15 years later, as One Nation's leader upper house candidate in the NSW election, he has savaged his former party for failing to tackle fraudulent claims of being Aboriginal.

'It's surprising that Labor and The Greens, who pretend to respect Aboriginality, have not introduced this policy already,' Mr Latham said.

Indigenous people were not counted in the Census until a 1967 referendum passed with 90.77 per cent support.

Special benefits for Aboriginal students debuted in 1969.

During the early 1970s, Gough Whitlam's Labor government introduced a policy of indigenous self-determination.

Indigenous land rights activist Noel Pearson has criticised the prevailing system of 'passive welfare' which originated under Mr Whitlam, who Mr Latham worked for as a former prime minister during the 1980s.

Mr Latham is running for a seat in the NSW upper house at the March 23 elections.