An extra 1000 call centre staff will be contracted to help Centrelink answer the more than one million telephone queries from welfare recipients each week.
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Human Services Minister Michael Keenan says the extra operators will "help ease the burden on busy phone lines" especially during peak periods when people find it hard to get through.
The new staff will be based in Australia, but will be hired by private companies after a six-month, $51.7 million trial of 250 call centre operators employed by Serco.
Labor introduced the model of using private providers at the tax office in 2008, Mr Keenan said.
"The evaluation we've had of that has been very successful. It has met people's expectations and it has allowed us to improve our services," he told reporters on Monday.
But opposition human services spokeswoman Linda Burney warns the government is merely plugging a hole and it will eventually overflow again.
And the union says extra contractors will not fix the problems caused by slashing 5000 department staff.
"The Turnbull government has cut and cut at Centrelink and is now trying to use the appalling service standards it has caused as justification for privatising a critical public service," CPSU national secretary Nadine Flood said.
Mr Keenan said the extra 1000 workers were temporary until the government's digital service was rolled out.
Australian Associated Press