The Northern Territory Government will refer parents whose children do not attend school to income management, saying the measure is part of the CLP's plan to reduce crime and strengthen community safety.

From term four, the policy will apply to parents receiving government income support, with Education Minister Jo Hersey stressing that every parent has a responsibility to get their child to school.

"We know that children who regularly miss school are more likely to disengage, fall into antisocial behaviour and ultimately into crime. This is about helping families meet their obligations and supporting young people to build a better future," she said.

"If parents don't want to be income managed, the message is simple: get your kids to school."

It is understood that Commonwealth legislation allows state and territory child protection officers to refer individuals to enhanced income management.

"Keeping children in school not only improves their chances of success, but it keeps them away from crime and gives them the skills to contribute positively to society. Stronger families mean safer community," Ms Hersey said.

The NT News reported the Chief Minister and Cabinet have been engaging with the Federal Government's Department of Social Services to finalise arrangements for accepting referrals from the Department of Education and Training.

Liberal Senator Kerryne Liddle, the opposition spokesperson for Indigenous affairs, has repeatedly called for action to improve school attendance in remote areas, linking it to youth justice issues.

Speaking at a Senate inquiry in February, she asked experts: "We all know that school provides protective factors. If we're talking about the ability to have a view over these children early, what do we do to address getting those children into school?"

"You can only have so many social workers knocking on doors, and by then, we've already failed these children. How do we get those kids into school early? We know the early childhood development target in the Close the Gap strategy is going in the opposite direction, as is out-of-home care, self-harm, suicide and adult incarceration. How do we actually get those kids in view earlier if those kids aren't going to school? The most at-risk kids aren't going to school."

The policy of income management has long been criticised by Indigenous organisations, who argue it is punitive in nature and fails to address the root causes of low attendance — particularly in remote and isolated parts of the NT.

Independent NT MP, Justine Davis, was highly critical of the announcement, stating "income management doesn't work," noting, "decades of evidence tells us this".

"Multiple evaluations have shown it doesn't improve child outcomes, doesn't increase school attendance, and doesn't reduce disadvantage," she said on Monday. "What it does do is stigmatise families, create barriers to accessing services, and add administrative burden without addressing the root causes of non-attendance."

Last year, truancy fines of up to $370 were introduced, as the NT continues to record some of the lowest school attendance rates in the country. The latest Closing the Gap report found attendance for Indigenous children in years 1 to 6 was 61.3 per cent — almost 30 points lower than their non-Indigenous peers and about 20 points below the national Indigenous attendance rate for the same age group.

Ms Davis said the government was taking the "lazy approach" by "punishing families instead of addressing systemic failures".

"You cannot income manage your way to better education outcomes," she said.

On Monday, the National Network of Incarcerated and Formerly Incarcerated Women and Girls condemned the decision, saying there is "nothing caring about taking food from children's mouths".

"While we acknowledge that school attendance is a government priority, punishing families will not address the reasons why many children do not feel safe or supported in school environments," lawyer Debbie Kilroy said.

"Children disengage from education for complex reasons: racism, bullying, trauma, poverty, disability, language barriers, and the ongoing impacts of colonisation."

Ms Kilroy argued that if the government "truly cared" about Indigenous children, they would "work with families and communities to make schools accessible, culturally safe, and welcoming, not impose economic punishment on already struggling households".

"The answer lies in relationships, not retribution," she added.

Community group Justice not Jails (JNJ), which describes itself as being formed in "opposition to racist 'tough on crime' agendas that target Aboriginal families and communities," also criticised the policy.

"If the Crime Reduction Strategy recognises strong families are foundational to safer communities, then where is the focus on reducing poverty, ensuring stable and appropriate housing, increasing cultural representation and inclusion, and addressing the social despair that underlies harmful behaviours?" JNJ member Sarah Katz said.

"Punitive, paternalistic measures are harmful — as evidenced by history. This is yet another way in which the CLP is using laws and policies to increase trauma, division and social inequality instead of addressing the real challenges of building safer communities."