The federal government’s planned waiting period for young people to access unemployment benefits has hit a Senate-shaped roadblock for the second time in as many years.

The original plan was to enforce a six-month wait, but the unpopular 2014 budget measure was blocked.

It was revised to a one-month delay in this year’s budget, but the government was unable to sway enough support to get the legislation over the line. It was voted down 30 to 35.

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Independent senators Nick Xenophon, Jacqui Lambie and Glenn Lazarus, along with Palmer United’s Dio Wang and the Motoring Enthusiast Party’s Ricky Muir, voted with Labor and the Greens to defeat the bill.

The government said the measure would have saved the budget $173.3 million over the next four years.

Greens Senator Rachel Siewert welcomed the rejection of a measure she described as “cruel and harsh”.

“This sort of measure that keeps young people off income support means that young people are subjected to living in poverty, which is another barrier to being able to find work,” Senator Siewert said.

“The government during the debate today were claiming it wasn’t saving them money, because they claim to be investing money in young people … although I think it was a savings measure on the backs of young people.

“They were also taking the opportunity to put in place harsh punitive measures on young people, when there was no evidence to support that.”

Officials from the Department of Social Services admitted to a Senate committee there had been no modelling to suggest enforcing such a wait would prompt young people to get a job.

“The tide was fairly against the government in the beginning,” Senator Siewert said.

“The community very clearly rejected making young people wait six months.”