During university I was on Austudy (Which is the Australian Dole for Students) while trying to work a little to get some extra spending cash.
Sure, every $1 you earnt lost you 50c of Austudy, but once your living costs are met, the rest of what you earn is discretionary funds - the remaining 50c is more valuable because you're free to spend it on what you want.
That wasn't the issue. The issue was back then, that on every second Thursday you had to physically go into a CentreLink office to fill out a form saying "Yes, I earned this much money this fortnight in my part-time job." and then spend a few hours (kid you not) waiting in line to submit the form. Some CentreLink offices on their own initiative would send out an office worker to collect all the forms from the people in the line, but this wasn't government policy.
You couldn't submit early, and if you submitted a late, "Oh that's okay, you'll still get your benefits, but we'll have to pay them to you next fortnight." Not feasible when basic support was what you were trying to live on.
In effect, the entire system discouraged you from looking for additional part-time work.