The homeless and the poor in NSW will be able to complete charity work or treatment programs as a way of paying off fines.
Attorney-General John Hatzistergos said the Australian-first reforms would be made in the NSW parliament this week, allowing a two-year trial to proceed.
"Currently we have a system in which any unpaid penalty notices and court fines are ultimately referred to the State Debt Recovery Office (SDRO) for enforcement action," Mr Hatzistergos said.
"This system works well for people who have an income and assets.
"However there are many disadvantaged members of the community who are simply unable to pay."
Under the new system, disadvantaged people such as the homeless, mentally ill and those in acute financial hardship can apply for a Work and Development Order.
Work will then be carried out for approved charities, or a person could also be asked to complete an educational, vocational or life skills course as well as counselling and treatment for drug and alcohol abuse.
The changes were announced as the auditor-general revealed the NSW government had written off fines worth $56.5 million because it believed the money was not recoverable.
All up that means 243,885 fines will go unpaid.
Mr Hatzistergos said many fines issued to the poor and homeless were never paid.
The decision to allow people to work off their fines would also hopefully address problems of "secondary offending" which occurs when disadvantaged people can't pay their fines.
The offenders then get dragged deeper into the criminal justice system because of their fine debts.
