Unemployed Australians will be given at least $75 to help pay for their power bills, but are not being offered a lasting increase to their Newstart payments.
People on Newstart were initially excluded from the one-off "energy assistance" budget sweetener, which is worth $75 to singles and $125 for couples.
But Scott Morrison has caved in to pressure and agreed to include the unemployed.
Despite the $80 million post-election backdown, the prime minister denied it was an afterthought.
"We're just getting it done," he told ABC radio on Wednesday.
Labor had planned to test the government's numbers in parliament by proposing to extend the payments to Newstart and other welfare recipients.
"It wouldn't be the first time the government has tried to head off a bushfire," Opposition Leader Bill Shorten told Sky News.
Subject to legislation passing the Senate on Wednesday, the enticements will be paid by the end of June.
However, the government is defying calls to raise the "unnecessarily cruel" Newstart rate.
Economists and welfare advocates are bitterly disappointed the federal budget was silent on the unemployment allowance, which has barely budged for more than 25 years.
Newstart recipients are given $538.80 per fortnight, while aged pensioners take home $834.40.
Liberal senator Arthur Sinodinos has broken ranks to join calls for an increase, but Prime Minister Scott Morrison is digging in.
"He didn't say now, I stress. He did not say it needs to go up now. He said that's something you consider down the track," Mr Morrison told ABC News Breakfast.
"What we're doing is getting those people in record numbers who are on Newstart into jobs - that's the best form of welfare."
Welfare advocates have described his inaction as a travesty.
Labor has committed to reviewing the Newstart rate if it wins the next election.
"Everybody knows it's inadequate but we want to understand the interaction with the tax system and the other benefits system," Mr Shorten said.
Meanwhile, welfare recipients will soon be forced to automatically report their employment incomes, saving taxpayers billions of dollars.
In the budget's single biggest savings measure, the government expects to bank $2.1 billion over five years by "simplifying and automating" the social security reporting system.
From July 1, people who receive Centrelink payments and are also employed will automatically input their fortnightly income, rather than calculating and reporting their earnings.
Government officials expect the measure will reduce the likelihood of welfare recipients being overpaid and subsequently chased for the money.
Labor's social services spokeswoman Linda Burney said people should be responsible for returning overpayments.
"But let's hope that this is not robo-debt mark two," she told reporters.
Cashless welfare card trials are also being extended for another year to June 2021, at a cost of almost $129 million.
Australian Associated Press