The controversial company tax cuts, which will reduce the rate to 25 per cent for all-sized businesses, are due to be debated in the upper house on Wednesday.

The Nick Xenophon Team says it will vote against the tax cuts because the coalition should take them to an election.

"We do not support the proposed tax cuts for big business, especially when the Budget is in deficit," Senator Rex Patrick told AAP on Monday.

But Australian Conservatives senator Cory Bernardi says he is backing the cuts, and so is Liberal Democrat David Leyonhjelm.

New independent senator Steve Martin is still negotiating on both the tax cuts and the welfare reforms, and has not revealed which way he will vote.

A spokesman for Social Services Minister Dan Tehan told AAP the negotiations were continuing on the welfare changes, which were debated on Monday night.

"The welfare reform bill is an important reform and the government is working with the crossbench to pass this legislation," he said.

The proposed changes include a major overhaul of compliance measures, including a demerit-point system for people who persistently dodge job-seeking obligations.

The coalition also wants to remove "intent to claim provisions", which protect people who are entitled to welfare but cannot lodge a claim due to personal circumstances.

Community organisations fear these changes, among others, could further punish vulnerable people as well as dependent family members of welfare recipients.

The legislation also seeks to tighten exemptions for drug and alcohol dependence, increase wait times for unemployment payments, and axe the wife pension and bereavement allowance.

Australian Associated Press