Welfare recipients have been given until at least the start of June before they need to hunt for work under extended coronavirus relief measures.
Mutual obligation requirements, such as job interviews, have been suspended again until 1 June.
Employment Minister Michaelia Cash says any further extensions will depend on Treasury figures and ongoing impacts of restrictions in place to curb the coronavirus.
Senator Cash says mutual obligations will be reintroduced in stages.
Employment Minister Michaelia Cash announced the suspension of mutual obligations on Thursday. Source: AAP
"In the first stage there will be no penalties or suspensions applied," she told reporters in Canberra on Thursday.
"This should give people confidence that they can pick up the phone, talk to their provider.
"But if they don't get around to doing that, or there are reasons they are unable to do that, no suspension or penalty will apply."
Greens senator Rachel Siewert says the system will be overwhelmed when mutual obligations begin again, given the coronavirus pandemic has forced hundreds of thousands of people onto welfare.
She's calling for the requirements to be paused for six months and to move away from a punitive approach to one where there are incentives for employment providers.
"Now is the ideal time to reset how we support jobseekers," she said.
"We must move to a supportive model that meets people's needs and focuses on supporting people, rather than punishing them because they can't find jobs that are not there."
Meanwhile, Prime Minister Scott Morrison on Thursday announced almost 600,000 workers lost their jobs as economics conditions worsened in April.
Prime Minister Scott Morrison said the unemployment figures were shocking but Australia was well placed to bounce back. Source: AAP
"Almost 600,000 Australians losing work can disappoint that hope, it can break hearts," he told reporters on Thursday.
"But it's important as a country that we stand firm and stand together."
Treasurer Josh Frydenberg said it was a "tough day" but the government was prepared for the bad news.
"Today's unemployment numbers reveal the real and painful economic impact of the coronavirus," he told reporters on Thursday.
"This reiterates why our financial commitments to respond to the coronavirus were and are so important."
Mr Frydenberg said Treasury figures showed the unemployment rate could still peak as high as 10 per cent.
Australian Bureau of Statistics figures released on Thursday showed the unemployment rate rose one percentage point to 6.2 per cent, as 593,300 people lost their jobs in April as a result of the coronavirus pandemic.
Underemployment was up 4.9 percentage points to 13.7 per cent, while the participation rate - the number of people working or looking for work - was down 2.4 points to 63.5 per cent.
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