One in 10 employees at the agency, which oversees Centrelink, would lose their jobs if the Coalition is re-elected and cuts 2700 jobs under plans revealed in the federal budget.

Community and Public Sector Union national secretary Melissa Donnelly blasted the proposal on Wednesday, saying the job cuts showed the government was turning its back on flood-affected communities and on staff delivering welfare.

But the federal government has struck back, claiming the union simply didn't understand the budget and that Services Australia was able to "surge" its workforce to meet spikes in demand.

The budget revealed job cuts at Services Australia would continue after years of staffing reductions that have shrunk the welfare agency by thousands of staff over the last decade.

Ms Donnelly said the government's next round of job losses at the agency would have a significant impact as communities looked to Services Australia to deliver disaster assistance.

"What it means in material terms for the community is that people will wait longer to have their phone call answered," she said.

"People will wait longer to have their claim processed. And for those employees in Services Australia, they will face backlogs, longer processing times and more difficult arrangements to provide the services to the community that they need."

The government's planned job cuts would likely occur after the flooding had passed, but Ms Donnelly said she was concerned about the agency's ability to respond to future disasters.

"Centrelink, Services Australia, were struggling with their business as usual work prior to the pandemic. The pandemic really created a huge increase in workload," she said.

"But we've also seen bushfires and floods, and other disasters. Services Australia plays a vital role in providing disaster support and relief. We know that these are increasing events in the Australian calendar, and Centrelink and Services Australia just need the staff to provide that support."

A spokesperson for Senator Reynolds said the agency's "surge" model, using contractors and redeployed public servants to meet spikes in demand, had worked well and would be used again next financial year.

"Each year the budget sets the baseline resources for Services Australia - surge resources including additional staff are provided throughout the year as required to meet demand," the spokesperson said.

"We've seen very fast payment (1-2 days) in recent disasters under this surge capacity approach."

The government expects additional staff, through the "surge capacity", will be hired on contracts as needed in response to natural disasters, such as the floods in NSW and Queensland.

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Staff working in other areas of Services Australia, along with other agencies, could also be redeployed to focus on the flood response, offering claims processing support and increasing the hours it operates.

Ms Donnelly said $23 million in the budget for the Department of Veterans' Affairs to clear a backlog in claims failed to deliver relief for veterans, who are facing growing delays in receiving compensation for conditions and injuries acquired during their service.

"The budget measures contained only a fraction of guaranteed funding of what is required and what was promised," she said.

Veterans' Affairs Minister Andrew Gee, who on Saturday revealed he nearly resigned from cabinet before being promised $96 million required to clear the backlog, said previously the full funding would not appear in budget papers.

Ms Donnelly said the union had members in the Department of Veterans Affairs with 170 cases on their desk to deliver.

"The small budget measure last night is not going to change the dial," she said.

Opposition veterans' affairs spokesperson Shayne Neumann called the latest Veterans' Affairs budget a national disgrace, repeating Mr Gee's own comments that the $23 million in funding would only "kick the can down the road" on clearing the claims backlog.

Mr Gee in Parliament on Wednesday repeated his promise that the government would provide $96 million to clear the claims backlog.