Job providers say a remote work for the dole scheme is “causing more harm than good”.

A draft report by Jobs Australia – a lobby for non-profit employment service providers - says that jobseekers in remote communities have more strict requirements than others, and that many communities face skyrocketing financial penalties.

The work for the dole scheme known as the Community Development Programme (CDP) covers about 34,000 jobseekers.

It requires participants to work for five hours per day, five days a week, all year round.

For comparison, non-remote programs have no work for the dole requirements until their second year.

Jobs Australia chief David Thompson says the longer work requirements have seen remote communities incurring financial penalties at 70 times the national average.

“It's because people are being required to undertake longer periods per week and per year of work for the dole,” he told the ABC.

“So 25 hours a week for almost the whole year, as opposed to 15 hours a week for six months for the majority of people in mainstream Australia.

“And the way the contracts with providers are constructed, they are effectively not able to exercise discretion and have to report people and start the penalty process happening.”

Mr Thompson said financial penalties took one tenth of a participants’ fortnightly payment for each day of non-compliance.

“When they fail to comply they lose payments, and that means in some communities there are significant net reduction in income in those communities,” he said.

“We're hearing and have heard from people in those communities that there are families that are having problems getting enough food; stores that are reporting reductions in the amount of food they sell.

“And people generally are not regarding this as something that really properly fits with the realities of remote community labour markets and circumstances.”

Jobs Australia says CDP requirements should be adjusted so that communities can be empowered to make decisions about how it operates.

“What we're trying to do, in concert with the people providing the services — but more importantly, the people in those communities — is to find some solutions which will meet their realities, meet their aspirations and go a lot further in terms of meeting the Government's intentions in relation to those communities and people.”

A spokesperson for Federal Minister for Indigenous Affairs, Nigel Scullion, said the Coalition was already giving communities more control over the work program.