A Federal Government trial of withholding welfare payments from parents who do not send their children to school has shown the program didn't increase school attendance rates.

In 2009, the Federal Government launched a trial in six remote Northern Territory communities to try and increase school attendance and enrolment.

Parents who did not send their kids to school had their welfare payments cut.

But an evaluation of that trial has shown the initial approach did not work.

The evaluation says the program failed to improve the rate of school attendance.

It did have a slight impact on enrolment but the evaluation found children still dropped out of school around the middle of the year.

The government says a number of improvements to the scheme have been made since that first trial.

It hopes to roll out the program across the whole of the Territory next year.