Sexuality and gender will be asked about for the first time in the next national survey but the intersex community will not be counted.
A proposed question about intersex people was being misinterpreted as one about gender, Intersex Human Rights Australia CEO Morgan Carpenter said.
The term intersex refers to a person born with physical sex characteristics that don't fit typical definitions for male or female bodies, according to the United Nations.
The census could have asked whether a person had been told they were born with a variation of sex characteristics, Professor Carpenter said.
Similar questions have been asked in other surveys.
The problem wasn't with the question itself but misinformation surrounding it.
"The issues that have been raised now have not been raised in previous surveys," he told AAP.
Australia must do a better job of counting intersex people, Andrew Leigh said. (Lukas Coch/AAP PHOTOS)
The Australian Bureau of Statistics recommended a proposed question on intersex people not be used as it wouldn't have produced reliable data, the assistant minister responsible for the census said.
"We'll continue to work with the intersex community to ensure that they're counted in future surveys," Andrew Leigh told ABC radio.
"We need to do a better job of counting those Australians."
Excluding intersex people was not acceptable, Just.Equal spokesperson Rodney Croome said.
It was vital data was collected about people with variations in sex characteristics, Equality Australia CEO Anna Brown said.
The prime minister described the inclusion of questions on sexual orientation and gender as a common-sense solution.
"What the census is about is recording the state of Australia in 2026 and that's precisely what it wiIl do," Anthony Albanese told parliament.
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