The federal government has invited more than 50,000 people to apply for compensation as it reinstates part of its controversial welfare compliance regime.

The Commonwealth Ombudsman found almost 1,000 jobseekers had their payments cancelled over two years under a Centrelink compliance regime.

Following a review, the department is reinstating the framework, allowing Centrelink payment suspensions and penalties to resume.

More than 50,000 people have been invited to apply for compensation over the failure, as advocates question whether enough has been done to address the underlying issues.