A Centrelink plan to outsource work to 1,000 staff from labour hire firms has met fierce resistance from critics who say it will endanger the social safety net and further privatise the public service.
The Department of Human Services will use the contractors across multiple sites, possibly including its Queanbeyan office, in a move the main public sector union said amounted to giving up responsibility for the clean-up after the "robo-debt" saga.
CPSU national secretary Nadine Flood described the decision as "new and scandalous", and said labour hire had no place in the public service.
"Dealing with social security debts is an incredibly sensitive job that should be done by well-trained public sector workers. This is just another example of the government privatising our safety net," she said.
"DHS staff have an important job that they take pride in and that the whole community relies on. These privatisation moves make these jobs precarious and unnecessarily stressful.
"Staff are saying that morale has reached rock bottom and this has real implications for staff and the community."
DHS spokesman Hank Jongen on Wednesday said staff had been consulted about its plan to engage the workers on a contract basis, but denied the move was a new one.
It was engaging the additional workers as it dealt with a temporary surge in workload and implemented "measures which are strengthening the integrity of the welfare system."
"The department has engaged contractors over many years for specialist services and to support day-to-day operations to help fill short term requirements for finite periods," he said.
The decision comes after the Coalition announced last month the DHS was outsourcing call centre work to multinational services company Serco.
Labor Human Services spokeswoman Linda Burney said Centrelink needed permanent, full-time staff, qualified and familiar with complex issues facing Australians on income support, while Greens senator Rachel Siewert said an increase in public sector jobs was needed.
"More privatisation so the government can strengthen its efforts to crack down on supposed 'welfare fraud' truly beggars belief," Senator Siewert said.
"Meanwhile the community's trust in the Centrelink system is at an all-time low as the government barely touches the edges in attempts to reduce huge call wait times for those that are trying to get through and adjust their payments or receive support.
"This injection of private contract staff in areas such as 'robo-debt' recovery shows they are more concerned with raking back money than actually creating a social safety net that is functional and serves the community."
The Coalition also came under fire in October when it announced an unprecedented contract for Centrelink, under which 250 of Serco's Australian subsidiary staff will take calls about payments in a three-year pilot program costing the government $51.7 million.