The Federal Government has been urged to stop slugging people with fines under its controversial remote Work for the Dole program with claims it is "blatant discrimination" and has caused serious harm.

Key points: Since 2015, more than 340,000 fines have been issued to people enrolled in the Community Development Program

Since 2015, more than 340,000 fines have been issued to people enrolled in the Community Development Program About 80 per cent of participants are Indigenous people living in remote regions

About 80 per cent of participants are Indigenous people living in remote regions Report finds scheme has helped fewer than one in five people into an ongoing job

More than 340,000 fines have been issued since 2015 to people enrolled in the Community Development Program (CDP), according to data released by the Federal Government.

Roughly 33,000 people are registered with the program. They must complete jobs and activities to receive their Newstart allowance in remote New South Wales, Queensland, South Australia, Western Australia and the Northern Territory.

Fines are issued for non-attendance or refusing suitable work.

About 80 per cent of participants are Indigenous people living in regions where unemployment can be as high as 51 per cent. They're required to work 25 hours per week, for about $11.20 an hour.

To compare, there were 47,729 fines issued in the three months to September 2017 under the Jobstart program — which includes 760,000 people in major cities and regional areas.

In the same quarter, 54,758 fines were issued under CDP.

In a letter obtained by the ABC, the Australian Council of Social Services (ACOSS) and a coalition of key Aboriginal and Torres Strait Islander organisations requested the Government suspend eight-week penalties applied to people who don't comply with CDP rules.

"People [including reports of pregnant women] are going without food for days at a time, and some are disengaging from the social security system entirely," the letter said.

"The loss of income is harming people's health, causing deep distress and leading to a loss of social cohesion."

But Indigenous Affairs Minister Nigel Scullion accused ACOSS and the Aboriginal organisations of fabricating the claims and said they were a "blatant misrepresentation".

"These allegations are alarming, however I strongly question their validity," he replied.

"I am very concerned that if there is evidence that if this is occurring within communities, that you have not brought this to my attention sooner and in person."

The minister said fines were applied to all jobseekers around Australia, and most serious CDP fines were waived.

"There are strong protections in place to make sure that penalties are only applied when warranted," he said.

Cheryl Axelby from the National Aboriginal and Torres Strait Islander Legal Services said "these concerns had been raised by Aboriginal-led organisations for a long time now", and accused the minister of adopting "delay and diversion tactics".

'The CDP is not doing a very good job'

The Government's stoush with Aboriginal organisations over CDP comes as a new report from the Australia Institute criticised the $1.3 billion scheme as a costly policy that had failed.

Analysis by the Australia Institute said the scheme had helped fewer than one in five people into an ongoing job, and fewer than one in 10 remained in that job for six months or more.

The report's author, Rod Campbell, said the program "punished people for not having a job".

"The CDP is not doing a very good job. It's costing taxpayers more and it's providing disadvantaged jobseekers with less than the programs that came before it," he said.

Senator Scullion denied a request for an interview, but the Minister's spokesman told the ABC: "The CDP has been a resounding success that has exceeded our expectations.

"The criticisms of CDP from Labor and its special interest mates would see a reduction in services for remote communities and more taxpayer funds spent on administering sit-down money, and passive welfare which we already know is so harmful and destructive to remote communities."

Union says program 'racist' and should be scrapped

The Federal Government is in the process of reviewing the CDP model, after a Senate inquiry last year recommended the Government replace the current CDP compliance and penalty regime.

But the Australian Council of Trade Unions' Indigenous officer, Kara Keys, said the CDP should be scrapped altogether.

A Senate inquiry has recommended the current CDP compliance and penalty regime be replaced. ( Supplied: Department of the Prime Minister and Cabinet )

"It's a failed program, it's not meeting any positive outcomes for workers who are employed under the program," she said.

"It shows that it is racist, that it applies more heavily to Aboriginal and Torres Strait Islander people, and it shows economically that it just doesn't stack up.

"The program is extraordinarily expensive for achieving no positive outcomes for these workers. What the evidence shows us is that the program, to manage and administer, is costing us $360 million [per year]."

The CDP had "really been a disaster for communities", added Lisa Fowkes from the Centre for Aboriginal Economic Policy Research at ANU.

"There continue to be more penalties applied to this group than to any other Australian," Ms Fowkes said.

"There's not enough work to keep people busy and interested, and there's no prospect of a job at the end so people are getting very disillusioned with it. The other side of it is that when people don't turn up they get penalised."

People 'are being driven further into poverty'

On the Ngaanyatjarra Lands in far-eastern Western Australia, the local CDP contractor said the program had driven people into further poverty, because people had been fined for non-attendance or had dropped out.

Ngaanyatjarra Council chief executive Gerard Coffey said he had heard some families were relying on one relative receiving an age pension or disability pension to support several people.

"I've had a number of people tell me it's just too hard, and they'll just live off their family, because they've been on the phone and nothing's happened," Mr Coffey said.

"People don't have the same amount of money because that's not coming into their family.

"The community stores are telling us that people aren't buying the necessities in life that they normally have.

"You'd just take for granted that if you need soap, shampoo or toilet paper, those things would just be an absolute given that those would be purchased, but people are just forgoing those things, because money is not available."

He said people had waited "hours and hours" calling a 1800 number to speak to someone about their payments being suspended.

"English not being a first language for virtually anyone out there, it can make it extremely difficult and frustrating," Mr Coffey said.