The bill also cancelled the debts of 338 refugees who owe $8 million in total for detention debts.

Liberal Senator Judith Troeth crossed the floor to vote with the Rudd Government. She told the Senate that massive debt was a distressing aspect for those who flee to Australia to escape horrors abroad and described billing former detainees as "a blot on our statute book", reported The Age.

"No advanced society should have on its books laws like this and so I will be supporting the Government on this bill," she said.

"I can only ask the chamber to imagine how you would feel if you were a newly arrived person in Australia, in a detention centre, who was being charged every single night for your accommodation and board, and you have, quite literally, the clothes in which you stand up."

Victorian Family First Senator Steve Fielding tried to convince the Senate to make amendments to the bill to retain debts for detainees who were not refugees, including those people convicted of Australian criminal offences. He was persuaded to vote for the bill without the changes being made.

The Refugee Council of Australia (RCA) welcomed the passing of the bill, overturning policy to charge detainees for their time in detention which was introduced by the Keating government in 1992.

RCA CEO Paul Power said the policy was highly ineffective and heartless and that few people had the capacity to repay the debt.

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"As a cost-recovery measure, it was a failure. In the four years to 2008, the Australian Government invoiced 17,335 detainees for amounts totalling $170 million. Only 2.4 per cent of this money was repaid," he said.

"Australia was the only country in the world to charge immigration detainees for their time in detention. Few people will mourn the removal of this measure, but it will long be remembered as one of a number of very low points in Australian immigration policy."