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The federal government has offered tens of thousands of public servants at its biggest department a pay deal that is nearly 2 per cent below inflation.

And the Department of Human Services says the offer will be slashed to just 0.75 per cent per year if its 30,000 bureaucrats do not sign the deal within five weeks.

DHS, which includes frontline agencies Centrelink, Medicare and the Child Support Agency, is the first major department to make pay offer under the Abbott government's hardline policy on public sector wages and conditions.

The offer is a guaranteed pay rise of 2.3 per cent over three years, topped up with another 1.25 per cent if the deal is struck before  September 1 and the DHS manages to improve its management-to-worker ratio.

The official inflation rate was adjusted on Wednesday to 3 per cent per annum and under the DHS's offer, the most its staff could hope for is 1.18 per cent.

But it would come with strings, with workers expected to trade away up to $250 million in incremental pay increases, accrued annual leave, extra working hours and other cuts to conditions.

Departmental managers also want changes to the rules around flexible working arrangements for its workers, many of whom work outside regular hours in agency call centres.

Unions say the offer is “ugly” but DHS says it has made the best offer it can afford.

The scale of Human Services, its national reach and relatively high union membership set the scene for a bitter industrial struggle with the department’s bosses keen to put their proposal to an all-staff ballot as early as next week.

The CPSU has ramped up its recruiting efforts at DHS in recent weeks in anticipation of trouble and will seek to frame the pay offer as “full frontal attack” on tens of thousands of ordinary workers by the federal government.

The low offer will also be portrayed as a sign of things to come across the APS as public servants in 116 other agencies and departments negotiate pay and conditions.

The union believes it will be fighting on favourable ground with the giant department’s workers more likely to be female, to work part-time and to be paid less than the public service average.

More than 70 per cent of DHS public servants are women, 21,000 of them earn between $57,000 and $69,000 a year and only 3 per cent of that group live in Canberra.

CPSU National Secretary Nadine Flood says the DHS workforce is the opposite to the popular stereotype of well-paid Canberra public servants.

“Despite the government’s line on public servants being fat cats, the average Human Services worker is a mum who works in a suburban call centre or customer service centre and earns average wages,” Ms Flood said on Monday.

“This agreement is one of the ugliest we’ve ever seen.

“The Department of Human Services’ proposition asks workers to cop cuts to their rights, increases in their working hours and reductions in their wages. It’s a nasty proposition and staff hate it.”

But Human Services general manager Hank Jongen said his department had put together the best offer it could afford, arguing that each 1 per cent pay rise would cost the budget $181 million.

“We have explored every possible option in developing the new agreement and have invited input from all bargaining representatives, including the CPSU,” Mr Jongen said.

“The department has developed what it believes is the best offer possible and remains committed to putting the agreement to the vote as soon as possible.”