A bipartisan parliamentary committee has found the Abbott government's proposed "learn or earn" budget measure would breach Australia's human rights obligations if implemented.
But a government senator has blasted the approach of applying human rights to budget measures and says it is a corruption of the very term "human rights".
The government wants to strip people aged under 30 of the dole for six months unless they are in training or in work, and raise the eligibility age for the higher-value Newstart payment to 25 from 22.
But Parliament's joint human rights committee says the proposals are "incompatible with the right to social security and the right to an adequate standard of living", and "incompatible with the rights to equality and non-discrimination on the basis of age".
The report, chaired by Liberal senator Dean Smith, noted that the Social Services Minister Kevin Andrews' response "does not provide any further information as to how young people are to sustain themselves during a six-month period without social security".
The committee is comprised of Senator Smith and his Liberal colleague Ken Wyatt, two Nationals Matt Canavan and David Gillespie, four Labor members and Greens senator Penny Wright.
The Australian Council of Social Service has seized on the report and said it is a "final indictment on the flawed legislation which should now be dismissed by the Senate".
When asked about the committee's findings in question time on Tuesday, Prime Minister Tony Abbott said he stood by the policy.
"I am all in favour of rights. I am also in favour of the rights of taxpayers not to have their money abused," he said.
"I am in favour of the rights of taxpayers to say that young people should be doing the right thing by themselves and by our society."
A spokeswoman for Mr Andrews defended the proposal, saying it "provides a safety net" because jobseekers can apply to study and apply for the student payment.
"The joint parliamentary committee on human rights operates independently from government, as it should in a democracy," the spokeswoman said.
"Governments make decisions in the national interest.
"The specific targeting of this measure to those young people who are job ready mitigates the risks raised by the committee."
PUP leader Clive Palmer said he refused to do any deal that would see his party support the proposed changes to Newstart at a media conference in Canberra on Thursday. Mr Palmer indicated he did not support changes that would discriminate against some unemployed people due to their age.
Family First senator Bob Day has long argued that the six-month waiting period should be reduced to one month but ACOSS says the Senate should reject any "compromise deal" which would "deprive young people of income support".
But Senator Canavan, a member of the committee, has told Fairfax Media the committee's approach is flawed.
"We have a strong and widespread social security system and to say that any change to that is a corruption of the term 'human rights' and does the cause of human rights a disservice," he said.
"The advice we receive from the committee is that any reduction of social security is a breach of human rights and I think that's ridiculous, it's not a fundamental human right to specific forms of social security," he said.
However Australia is a signatory to the International Covenant on Economic, Social and Cultural Rights.
Article 11 states that parties to the treaty "recognise the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing and to the continuous improvement of living conditions".
Senator Dean Smith said on Tuesday that he would "actively support any calls to review Australia's international treaty obligations to align them with the contemporary Australian community".
