Almost 100 asylum seekers and refugees brought to Australia from Manus Island and Nauru for medical treatment are being cut off from housing and income support.
The group - which includes women, children and the elderly - were evacuated from offshore detention for critical reasons including illness and injury.
Once in Australia, they sought court injunctions to prevent their deportation, with many then placed in community detention.
But the group has now been given appointments with the Department of Home Affairs to sign "final departure" bridging visas.
The visas, which have a six-month validity and can include the right to work, were issued to single men last year.
Now, families are being given six weeks to find new housing and work before they are cut off from income support, while couples without children will have just three weeks.
Jana Favero, from the Asylum Seeker Resource Centre, said the government was removing a crucial safety net and forcing vulnerable people into destitution.
"The particular circumstances of this group make them some of the most vulnerable people we have seen. Many have complex health conditions," Ms Favero said on Thursday.
"People have not had any work or study rights and have waited years with no resolution. Now they are told they have to find work with no safety net."
A Home Affairs spokeswoman said accommodation and living expenses for people from the cohort cost $120,000 per person each year.
"The Australian government will no longer provide financial assistance to these people," the spokeswoman said.
With the exception of the most vulnerable or those who represent a security risk, individuals will be expected to depart Australia by the time their visa expires, which is six months from its grant date.
"The Australian government's policy is clear - anyone who attempts to enter Australia illegally by boat will never be permitted to settle permanently in Australia," the Home Affairs spokeswoman said.
Daniel Webb, from the Human Rights Law Centre which represents the group, said people were frightened.
"These families have endured years of suffering and abuse in offshore detention and then more years of daily uncertainty in the community," Mr Webb said.
"They just want to get on with rebuilding their lives. But instead our government is ripping the roof from over their heads and forcing them into destitution."