The Human Rights and Equal Opportunity Commission (HREOC) has issued a warning about the Federal Government's plan to link Aboriginal welfare to behavioural change.

HREOC says debate over Government moves to change the current welfare system should take place in a manner that fully respects the rights of Indigenous Australians.

The Government is proposing to link welfare payments to changed behaviour, such as ensuring children are attending school and are kept clean and clothed.

HREOC says it would be deeply concerned if changed requirements applied only to Indigenous Australians based on their race.

It says any changes must comply with the Racial Discrimination Act or be rejected outright as morally repugnant.

The head of the ATSIC regional council in far north Queensland says the Federal Government's proposed changes are disastrous.

Terry O'Shane says the reforms do nothing to address the problems facing disadvantaged Indigenous Australians.

Indigenous Affairs Minister Amanda Vanstone says the changes will be introduced in partnership with communities but Mr O'Shane says that is ridiculous.

"Her making that statement is an absolute embarrassment," he said.

"You go to the community, you go to the poorest of the poor and that's why they want to stifle the voice of the elected arm, a government department goes there and says this, this and that people are going to agree.

"They're afraid of losing any funding in that community straight away."