Maurice Blackburn Lawyers told the Senate committee examining the government's response to the pandemic that the company's clients were experiencing long delays in receiving compensation payments.

Services Australia said the coronavirus was placing unprecedented demand on its services and that the agency was taking every possible step to help Australians during the pandemic.

Once a compensation payment is settled, claimants receive the money owed after Services Australia produces a clearance recovery notice.

In a submission to the parliamentary inquiry, Maurice Blackburn said the terms of most settlements allowed 28 days for a claimant to receive their money, in which time Centrelink should process the paperwork.

However, in Queensland alone the law firm said it had 22 cases experiencing delays. Some cases in NSW had waited 88 days for Centrelink to process payments, while other jurisdictions had also experienced issues.

"One less visible impact of the additional pressures placed on Services Australia staff is that, as staff were redeployed to cope with the surge in demand, the 'business as usual' services provided by the department began to suffer lengthy delays," Maurice Blackburn's submission said.

"We have found that we cannot, at present, rely on Centrelink delivering the clearance notice within the 28 days.

"It has become part of our regular workflow to make contact with Centrelink when the deadline is imminent to obtain a status update, so we can keep the client informed of likely time frames for payment to be received."

Maurice Blackburn estimated that among its own cases there were between $5 million to $10 million in payments held up by Centrelink.

"That is money which should have been circulating in the economy months earlier, rather than being locked away in an insurer's trust fund while we await Services Australia paperwork," the firm said.

Slater and Gordon ACT and NSW general manager Rachael James said the firm's clients had experienced similar difficulties receiving payments from Centrelink. These delays had increased during the pandemic.

"Our clients are some of the most vulnerable Australians and are relying on these payments to help make ends meet, pay medical bills and put food on the table for their families," Ms James said.

"They are not eligible for schemes like JobKeeper or JobSeeker and are relying on regular payments while they recover from injury and illness and can't work."

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An influx of JobSeeker claims has forced Services Australia to redeploy its workforce, spend on labour hire staff and train public servants seconded from other Commonwealth agencies.

It has processed more than 1.5 million JobSeeker claims since mid-March, more than the amount it would usually process in two years.

Services Australia spokesman Hank Jongen said the agency also experienced a high inflow of compensation activities due to the increase in people coming on to a compensation-affected payment such as JobSeeker.

"Staff were reallocated to help with compensation clearances and our focus is on actioning outstanding compensation settlements," he said.

"We prioritise compensation activities for people most in need. This includes those experiencing severe financial hardship, and we encourage anyone in these circumstances to contact us."

Maurice Blackburn in its submission said Centrelink could help reduce delays by ending its reliance on paper copies of documents being posted or faxed, and by accepting emailed documents. Access to fax machines, scanners and physical documents had been hampered by the pandemic, the firm said.

The company suggested using electronic signatures could speed up the process.

Ms James also said paper-based communications had hampered the progress of applications.