Welfare recipients who test positive to illegal drugs could have their income managed for the full two years of the Federal Government's proposed trial, even if they do not require ongoing treatment.

Key points: Welfare recipients who test positive to illegal drugs could have their Centrelink payments managed

Welfare recipients who test positive to illegal drugs could have their Centrelink payments managed Greens senator Rachel Siewert says the timeframe shows that the Government "is out to punish people"

Greens senator Rachel Siewert says the timeframe shows that the Government "is out to punish people" She says drug testing is designed to push people onto income quarantining

Greens senator Rachel Siewert said the two-year timeframe showed the Government was "out to punish people".

The trial of 5,000 welfare recipients across three separate locations is due to start next year, although the department expects fewer than 10 per cent to test positive.

Newstart and Youth Allowance recipients who initially test positive to cannabis, ice or ecstasy will have their income quarantined onto some form of cashless debit card, which could only be used for certain purchases.

Officials from the Department of Social Services told a Senate estimates hearing that a second positive test would see the welfare recipient charged for the cost of the test, and referred for treatment.

The department's Cath Halbert confirmed people would stay on the income management card, even if they did not require ongoing treatment for drug addiction.

"At least for the duration of the trial and potentially for up to two years," Ms Halbert said.

But Senator Siewert was not impressed.

"If they cared about providing health services, why do people have to fail a second test for treatment, yet you're dumped on the card after round one?" she told the ABC.

"It is becoming clearer by the minute that the drug testing is designed to push people at the first opportunity onto income quarantining."

Some details of welfare drug tests yet to be decided

The committee was told the location of the three drug test trial sites and the precise type of income management was yet to be decided.

But department secretary Finn Pratt said the location of a separate trial of the cashless debit card used to curb alcohol abuse and gambling could be a factor.

"If the two align then that would be an option," he said.

Senator Siewert said that "makes no sense" given welfare recipients in those communities already have 80 per cent of their income restricted to essential purchases.

"You're doing it anyway, for everybody, so how do you test the effectiveness of the drug testing?" she said.

The department said "one option" would be to quarantine a different percentage of income for those welfare recipients who failed a drug test.

"The underlying principle being trying to restrict people's access to cash so they can't purchase illicit drugs," Ms Halbert said.

The Government insists the trial is designed to help welfare recipients get the treatment they need, and find work.