Indigenous Affairs Minister Amanda Vanstone says legislation would have to be changed to allow the introduction of a so-called "smart card", replacing welfare payments for Indigenous communities.

The proposal has been put to the Minister by acting Aboriginal and Torres Strait Islander Commission (ATSIC) chairman, Lionel Quartermaine.

He believes living conditions for Aboriginal children could be improved if the card was used to buy food and other essentials, but not alcohol.

Senator Vanstone says the idea has merit but she is keen to explore less complex solutions.

"People are paid once they've met certain criteria they're entitled to welfare, and there is no entitlement for ministers or others at whim to allocate the money in a particular way," she said, "You would need legislative approval."

Mr Quartermaine says he is pleased the issue of child neglect is now higher on the community's agenda.

He says he hopes the minister will sit down with ATSIC to move the issue forward.

"I set out to achieve something and I believe I've achieved it, I think that everyone in Australia and our society are now taking neglected children seriously," he said.

"Because we can no longer put our heads in the sand and ignore our children, white or black ... and it's serious."