Almost 25,000 welfare recipients in the Northern Territory and Cape York will also be shifted on the cards under changes outlined in the federal budget.
The government has set aside $17.5 million for that aspect of the change.
But it has not said how much it will cost to make the cashless welfare scheme permanent because it is still negotiating with companies who provide the cards.
Government minister Trevor Evans has introduced a bill to parliament to lock in the budget announcement.
“The program has the objective of reducing immediate hardship and deprivation, helping welfare recipients with their budgeting strategies and reducing the likelihood they’ll remain on welfare,” he told the lower house on Thursday.
The cards freeze 80 per cent of Centrelink payments so the money can only be spent on essential items.
It prohibits people from spending money on alcohol, drugs and gambling.
Welfare recipients in the South Australian region of Ceduna, the East Kimberley and Goldfields in Western Australia, and Bundaberg and Hervey Bay in Queensland, could soon be permanently lumped with the cards.
Labor social services spokeswoman Linda Burney says the scheme targets Indigenous Australians.
She says the Morrison government always intended to make the card permanent.
“The auditor-general found there was no evidence the card works and the government hasn’t even published the review they promised,” Ms Burney told AAP.
“There is no question this discriminates against First Nations Australians.
“It would be better to invest in local job creation and services.”
Under the changes, welfare recipients can also choose to remain on the program if they move from one of the designated areas.
The bill allows the department to tell community groups when a person has left the program.
It gives the minister power to decide how a person must demonstrate reasonable and responsible management of their financial affairs in order to exit the scheme.
It also allows the department secretary to review exemptions from the program and revoke decisions allowing people to leave.
An independent study of the cards from earlier this year found the cashless debit system did more harm than good.
The joint analysis by Queensland, Monash and Griffith universities found people put on the cards had problems paying bills and making other purchases.
They also faced extra financial difficulties from fees associated with paying by card.
Help our journalists uncover the facts
In times like these InDaily provides valuable, local independent journalism in South Australia. As a news organisation it offers an alternative to The Advertiser, a different voice and a closer look at what is happening in our city and state for free. Any contribution to help fund our work is appreciated. Please click below to donate to InDaily.