Water Resources Minister David Littleproud says the Morrison government will also invest a further $7.9 million into the scheme to make sure its settings are right - bringing it total contribution to $56.9 million.

Floodplain harvesting can only occur during very wet period, but as a result of the drought no significant harvesting in the NSW Northern Basin has occurred since 2016.

"This project is a vital piece of work," Mr Littleproud said in a statement on Saturday.

"Harvesting floodwaters during the wet is essential to viable and productive farming."

NSW will now have until June 30, 2021 to have the policy in place, giving farmers and irrigators more time to give their feedback.

NSW Water Minister Melinda Pavey said an independent peer review found the project was on the right track, but local communities need to understand the modelling, the benefits to farmers and the rationale for delivering water back to the river.

The announcement comes 24 hours after Prime Minister Scott Morrison announced an additional $100 million in drought relief funding, which was described as "too little, too late" by Labor.

Of this, $33 million will be used to restart the mothballed Drought Community Support Initiative that gives up to $3000 to eligible households, while 13 additional councils will get $1 million each for local projects to boost economies.

More than $50 million will be put towards expanding and simplifying the Farm Household Allowance, a payment for farmers struggling to pay bills.

The latest package comes on top of the $7 billion set aside in drought relief funding, Liberal backbencher Julian Leeser said.

"It's going to make a big difference to people on the ground," he told ABC television on Saturday.

But opposition frontbencher Andrew Giles says while Labor supports any additional support for farmers and drought-affected communities, the government's package is "too ad hoc".

"We need a plan for drought, and that's got to be a plan that involves the government taking seriously the challenge of climate change," Mr Giles told ABC television.

There has been criticism that while the country has been locked in drought, the prime minister has been wined and dined in the US by President Donald Trump, while announcing a $150 million package towards NASA's moon-to-Mars space mission.

"I think that the prime minister can do many things at once," Mr Leeser said defending Mr Morrison's trip.

"It's important at the same time that we're thinking about the drought, that we're also thinking about the future of our economy and jobs. And that's why we've put the $150 million investment into the space program."

Australian Associated Press