Branding them "fake refugees", Immigration Minister Peter Dutton says they have until October 1 to provide detail about their protection claims. He says some have refused to lodge protection claims while others have refused to give even basic information about their identities.

"This is a very serious situation and it's costing Australian taxpayers hundreds of millions of dollars a year," Mr Dutton said on Sunday. "Money that could be spent on education, on health, on police, on other services in the community. Now we aren't going to tolerate that any longer."

Many arrived without identity documents on boats run by people smugglers up to seven years ago under the previous Labor government, he said.

Mr Dutton said many were residing in Australia on government benefits which last year cost around $250 million in income support alone.

But refugee advocates are furious over the move, saying it punishes people who have been waiting patiently to submit their claims.

The Refugee Action Coalition's Ian Rintoul called the deadline "completely arbitrary" and said it was a cruel hoax on people whom the government has left in limbo.

"These people have been denied legal help by this government," said Mr Rintoul. "They have systemically denied them the possibility of making an application. To suggest that they are unreasonably consuming taxpayers dollars is simply vicious."

Human rights lawyer George Newhouse said the move showed a "blatant disregard' for the processes of the law and the cost of legal aid.

And advocates at the Edmund Rice Centre accused Mr Dutton of "yet another unfair and extreme attack" on refugees and asylum seekers.

"Peter Dutton and the Turnbull government are deliberately making the process of applying for protection as difficult as possible," the centre's Dominic Ofner said.

"There are over 21 million refugees worldwide and the international community is facing the biggest humanitarian crisis since World War II. In this context, it is simply beyond embarrassing that our government is doing everything it possibly can to deny basic rights to 7,500 people seeking asylum in Australia."

Labor's immigration spokesman Shayne Neumann criticised Mr Dutton for branding people "fake refugees" before they had even lodged their applications.

"I think the public will see what this is all about. It's about Peter Dutton putting his name in the paper, angling for the prime ministership - not doing his job and angling for Malcolm Turnbull's job," he said. He also questioned why the government was only now acknowledging it had a problem after nearly four years in power.

With AAP