The lower house of parliament, the National Council, voted to block asylum seekers' right to welfare benefits, and to provide only the minimal emergency assistance.
Justice Minister Simonetta Sommaruga spoke out against the reduction in financial support, saying that that the changes are “contrary to the humanitarian tradition of which our country likes to boast," newspaper Tages Anzieger reported.
She also criticized the fact that the measures would be like torture for people with no home or right to work, who were already traumatized by their ordeals, online news site Le Matin reported.
The more liberal proposals of the Greens and Social Democrats were rejected in favour of proposals to tighten asylum laws.
Beat Meiner, head of the Swiss Refugee Council said the left-wing parties who opposed the move would likely force a referendum if the upper house votes to approve the legislative changes in the autumn.
"I can't imagine the Social Democrats and the Greens will allow this to go through."
But Social Democratic Councillor, Alexander Tschäppät, conceded that the "heated atmosphere" created by the Swiss People's Party and its allies meant the provisions would almost certainly be ushered through by the electorate.
Several Councillors argued that the majority of asylum seekers were not here to exploit Switzerland.
"Refugees are looking to us for protection, not for money", Christian People’s Party Councillor, Ruth Humbel, told the website.
In a surprise move, the National Council voted by 90 votes to 88 to keep some form of family asylum in place. The compromise position taken was to allow the wife and children of an asylum seeker in, but not the extended family.
See also: Switzerland tightens asylum laws